Apple Computer Inc. announced Monday that consumers have purchased more than 250 million songs from its iTunes Music Store since its launch, a rate of nearly 1.25 million per day, putting the Cupertino-based company on track to potentially sell 500 million songs this year.
The iTunes store is now available in 15 countries and represents more than 70 percent of the global digital music market, according to a statement from the company.
If Apple’s sale of 4.6 million iPod digital music players in the fourth quarter is any indication, downloads are rapidly becoming a key pivot point in the music industry. Though legally downloaded music only accounted for 2 percent of all music sales last year, the actual number of downloads surged by 376 percent during the past six months, according to Nielsen SoundScan.
No one knows quite how iPod, iTunes and the competing devices and services eventually will affect the music industry, but digital music is already changing the way artists think about their craft.
Using digital formats can allow them to print CDs on demand, for example, and reach a broader audience with a smaller amount of product. Lawyers are busy figuring out how to include digital rights in record contracts, and industry executives are reconsidering how to position and market their acts.
“Up until now we’ve been limited; it’s been about selling a plastic disk,” said Steve Berman, head of marketing and sales for Interscope Geffen A & M; Records, owned by Universal Music Group. “Now it’s a digital explosion and it could be about a completely different thing. This is just the tip of the iceberg.”
Singles-driven market
While iTunes and competing services like Los Angeles-based Napster Inc. may give artists greater independence from music labels, they also may force them to become more singles-driven.
Albums have dominated the industry for the past 35 years, but on any album, there are stronger tracks and weaker ones. Until now, consumers had to buy all of them, whether they purchased an LP, a cassette or a compact disc.
In the digital age, consumers can pick and choose the songs they want, and evidence suggests that they will skip the filler in between. In 2004, more than 140 million individual songs were purchased and downloaded legally, while only 5.5 million albums were purchased electronically.
“When you see billions of songs being traded, swapped, downloaded and stolen, you see what the audience is gravitating towards,” Berman said. “The art has definitely moved to be a little more track-driven.”
Not all artists or music industry executives see it as an either-or proposition.
Singer Toni Childs, who just released a single exclusively on iTunes, said she doesn’t plan on becoming a singles artist and is using the iTunes release as a way of drawing interest for a compilation album she is working on.
Similarly, rock band U2 developed a partnership with Apple to advertise a custom iPod in October, and released its latest album, “How to Dismantle an Atomic Bomb,” through the iTunes Music Store before it was available in traditional stores, distributed on CD by Interscope.
Berman said that strong digital sales for U2’s newest album corresponded with strong iPod sales in the fourth quarter. About 65,000 copies of the album have been scanned so far, according to Interscope.
