Apple Considers Major iTunes Overhaul As Music Downloads Continue To Decline

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Billboard reports Apple is considering a dramatic iTunes Store overhaul as music downloads continue to decline despite the release of iTunes Radio.

Last month reports suggested that Apple may be creating an on-demand streaming music service, similar to services such as Spotify, in order to boost sales. The company is also reportedly considering an iTunes app for Android.

“iTunes Radio hasn’t solved the problem of refreshing the iTunes store,” said a senior label executive. “While listeners are clicking the buy buttons, the traffic it is driving is in the low single digits of listeners.”

According to a report released in January, digital music sales fell 5.7 percent in 2013 and only one to two percent of iTunes Radio users will buy a song after hearing it on the company’s streaming service. iTunes still accounts for 40 percent of music sales in the U.S. and iTunes Radio is the third largest streaming service after Pandora and iHeartRadio.

Apple is reportedly discussing options on how to improve iTunes, as they are trying to overcome competition from Android and other music streaming services. iTunes Radio is currently a free ad-supported service, with iTunes Match also available as a paid service.

Meanwhile, in the U.S., Apple is losing its most valuable customers. “Two-thirds of its high-value customers are now in subscription services,” said one source. “That has been an eye-opener for them.”

If Apple were to release an on-demand subscription service they would be satisfying all three music models customers are interested in, including music downloads via iTunes, free music streaming through iTunes Radio, and a premium on-demand music service, which could offer an ad free experience with premium features.

According to a music executive, Apple has dramatic plans ahead for iTunes, which could lead to a “completely different” experience within the next several years.

A software engineer with a passion for creation and innovation using technology. To learn more about me, check out my personal website, which contains links to my projects. Email: nick@iphoneincanada.ca