TMO Reports - Apple Claims 50 Million iTunes Downloads, Will Miss One Year Goal

by , 10:30 AM EST, March 15th, 2004

Apple Computer announced Monday that its iTunes Music Store had sold over 50 million songs since its launch on April 28, 2003. At the current download rate, Apple predicted subscribers will download 130 million songs this year, or 2.5 million cuts per week.

"Crossing 50 million songs is a major milestone for iTunes and the emerging digital music era," said Apple CEO Steve Jobs in a prepared statement. "With over 50 million songs already downloaded and an additional 2.5 million songs being downloaded every week, it's increasingly difficult to imagine others ever catching up with iTunes."

The company said that the 50 million songs excluded those redeemed through a PepsiCo. Inc. iTunes promotion to give away 100 million free songs. The promotion ends March 31. The 50 millionth song, purchased last Thursday afternoon, was "The Path of Thorns" by Sarah McLachlan, the company said. Ms. McLachlan performed on stage at Apple's media event launching the Windows version of the iTMS last October.

In comparison with its closest rival, Napster announced February 23 it had sold 5 million song downloads since its launch less than four months ago. Although that keeps it ahead of other only-on-PC services' announced sales figures, it remains far behind iTunes, which serves both PCs and Mac users.

"I think this announcement is a sign that there hasn't been any real slackening in people's appetite for music downloads," Josh Bernoff, Principal Analyst with Forrester Research, told The Mac Observer, Monday. "Apple started off on a tear, and ever since they have been available on Windows, they have been moving extremely rapidly. I think we're also seeing a direct correlation between download numbers and the sales of iPod's as well."

Apple's iTunes Music Store lets Mac and PC users pay for and download over 500,000 songs and more than 5,000 audiobooks at US$0.99 each, from all five major music companies and over 300 independent music labels. The music can then be played on up to three computers, burned to CD, or transferred to Apple's iPod portable music player.

Apple's music service initially launched for Mac OS X users only. 16 days later, the company announced it had sold two million music downloads. It expanded the service to include Windows-based PCs in October 2003.

In briefings with the media last October when it had sold 13 million songs, Apple set a goal to sell 100 million songs by its first anniversary, which is 45 days from Monday, or six and a half weeks. At its current download rate, the company will fall far short of that goal by some 35 million.

Mr. Bernoff said Apple's failure to meet its own anniversary goal should not be construed as a sign there are troubles for Apple or the download music industry.

"We're still estimating about US$300 million in total subscriptions and downloads in the online music industry for 2004, so it may take a little longer for Apple to reach their goal," he said. "This certainly isn't a sign that Apple is in trouble or there are problems with the download music market."

Apple's iTunes music store, controls some 70 percent of the music download market, according the market researcher IDC. Major competitors to Apple include BuyMusic, eMusic, MusicMatch, MusicNow, RealPlayer, Rhapsody, Napster, and Wal-Mart. By the end of 2004, Microsoft, Amazon, and Sony have announced they will start their own download music services.

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