Monday, January 08, 2007

All the excitement and press around digital downloads is swept aside by the simple stat that wile digital sold $500M in songs in 2005, the rest of the market (CDs, etc...) sold $11.2B (but those sales are dropping). That's something like 9 Billion tracks per year - if there are 100M music buyer in the US, it's 87 tracks per year, 7 per month!

The key question for the industry is whether digital can grow enough to add to or replace lost physical sales. We get an initial indication here: the growth in digital from 2004 to 2005 (corrected) didn't offset the drop in physical sales.

These questions aren't academic. They're academic for Apple, but not for the content industry. And it's why it's important for innovation in content services to continue to make them more attractive to device users over the long term than iTunes (and other current offerings) appears to be.