Streaming Boom Stifles Music Downloads

A little more than 10 years after Apple opened the iTunes Music Store and shook the music industry, it appears as if music downloads are about to suffer the same fate that many other forms of music distribution have suffered. After global download revenues declined for the first time in 2013, the negative trend appears to continue in 2014. According to Nielsen’s mid-year music report, music downloads in the U.S. suffered double-digit declines in the first six months of this year, as music consumption continues to shift towards streaming.

Considering the most recent numbers, Apple’s $3 billion acquisition of Beats appears to make a lot of sense. If Apple wants to keep the dominant position in the music market it conquered with the iTunes Store a decade ago, the company needs to introduce a proper streaming service before Spotify and others run away with the market. Having acquired Beats Music, Apple doesn’t need to build a streaming service from scratch but can build on Beats’ alreadly solid product.