Apple’s presumed plans for an on-demand music service as part of its Beats acquisition is looking increasingly well-timed as Nielsen data shows that U.S. on-demand music consumption climbed 50.1 percent year-on-year, while music downloads fell by 12 percent in the same timeframe.
“With On-Demand streams surpassing 70 billion songs in the first six months of 2014, streaming continues to be an increasingly significant portion of the music industry,” says David Bakula, SVP Nielsen Entertainment …
Sales of individual tracks fell by 13 percent, with album downloads down 11.6 percent (giving a 12 percent overall average fall when an album is treated as ten tracks).
Morgan Stanley’s Katy Huberty calculated back in May that iTunes sales were down 24 percent year-on-year, and that Apple has relied on app sales to pick up the slack. Billboard magazine suggested last year that 2012 may have been the peak of the music download market, which appeared to have been confirmed earlier this year.
Eddy Cue admitted that Apple’s music business was in decline at a Re/code conference in May, with Spotify CEO Daniel Ek saying the same month that he had always assumed Apple would offer an on-demand streaming music service.
While Apple of course already has its streaming iTunes Radio service, this does not offer on-demand track selection in the way that services like Spotify do.
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