One-Third of U.S. Consumers Still Buy Music Downloads

10 Apr, 2015 By: Erik Gruenwedel

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Apple iTunes lost some market share to Amazon MP3 and Google Play in 2014

In an entertainment world gone streaming, consumer interest in buying music downloads still exists. In fact, one third of U.S. consumers purchased music downloads last year, according to new research from MusicWatch.

While seven out of 10 music download buyers shopped at iTunes last year, the company ceded market share to Amazon MP3 and Google Play. Apple iTunes’ share of music download revenue in the U.S. slipped from 67% in 2013 to 52% in 2014, while Amazon MP3 rose 2% to 19% and Google Play rose 4% to 11%.

Paid music downloads accounted for 37% of U.S. music revenue, while streaming contributed 27%, according to the Recording Industry of America.

“As the market leader, Apple bore the brunt of the drop in download sales, but iTunes still has tens of millions of loyal, paying music customers,” Russ Crupnick, founder and managing partner of MusicWatch, said in a statement. “Armed with a strong iOS product lineup and the potential of Apple Pay, the company is well positioned for its anticipated music-streaming service re-launch.”  

Indeed, iTunes music revenue share among iPhone users is 71% and 34% among Android smartphone users — which is higher than Google Play at 20%. MusicWatch found that many Android phone users still use their computers to buy digital tracks from iTunes.

On the streaming front, MusicWatch estimates that there are now nearly 130 million music streamers, using both audio- and video-based services.

“If the trends continue through 2015, streaming could surpass paid downloads as the largest revenue source for the U.S. music industry,” Crupnick said.

The top services ranked on past three-month usage:

1. YouTube (for music listening and music video streaming)
2. Pandora
3. Spotify
4. iHeart Radio
5. iTunes Radio

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