[UPDATE: Apple spokesperson Tom Neumayr has denied this report in a statement to Recode, simply saying it’s “not true.”]
A report from Digital Music News today citing sources close to Apple claims the company is currently considering a plan that would see it shutdown its iTunes Store music download business within two years. The move would mean the company would stop selling downloads of music from iTunes and instead focus entirely on monthly subscriptions to its Apple Music streaming service.
However, on top of the rather fast two year timeline quoted for exiting from the downloads business, the report does add that a 3 to 4 year timeline is also something being considered by Apple executives:
…the sources indicated that a range of shutdown timetables are being considered by Apple, though one executive noted that “keeping [iTunes music downloads] running forever isn’t really on the table anymore.” Also under discussion is a plan to “ride the [iTunes music download offering] out for the next 3-4 years, maybe longer,” when paid music downloads are likely to be an afterthought in a streaming-dominated industry.
And it continues by noting that sources say it’s possible Apple could stagger the exit from music downloads, removing them only in declining markets where streaming services are already taking over. “According to one source, an initial shutdown could take place in ‘tier 1’ countries like the United States, UK, and leading countries in Europe and Asia, with ‘tier 2’ and ‘tier 3’ countries experiencing a staggered shutdown in subsequent years.”
The move would be motivated by the continuing decline in sales of downloaded music as streaming services, many with monthly paid subscriptions like Apple Music, have become increasingly popular. The analysts cited in the report from Digital Music News, for instance, are expecting song download sales to decline as much as 30% this year down from a decline of 16% last year. And while the estimates say Apple could still be earning as much as $650 million from iTunes sales in 2019, by that time its Apple Music revenue could be approaching that of peak iTunes revenue levels of years past.
Earlier this year Apple confirmed that Apple Music is now at 13 million paying subscribers, up from 11 million back in February.
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