The normally Apple-loving Business Week has run a story based on the Nielsen SoundScan statistic that "average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter. Says independent media analyst Richard Greenfield: 'We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players.'"
Apple, which launched the digital music revolution (sic), may now be holding it back. Critics say Apple's proprietary technology and its refusal to offer more ways to buy or to stray from its rigid 99 cents a song model is dampening legal sales of digital tunes. "The villain in the story is the iPod," says Chris Gorog, CEO of Napster Inc, which sells both subscriptions and downloads. "You have this device consumers love, but they're being restricted from buying anything other than downloads from Apple. People are bored with that."
But leaping to the conclusion, the article says:
So will Jobs change his tune? Not unless he has to. Apple can barely keep up with demand for iPods, which reap as much as 25% gross margins, vs. minimal profits for each iTunes track. So right now there's no reason for the company to alter the way it sells music or make its player compatible with other services. But if download sales don't bounce back, music companies could start looking beyond Cupertino for answers.
