10 Years of iTunes: Digital Music Paves Way for Cloud-based Music Industry

10 Years of iTunes: Digital Music Paves Way for Cloud-based Music Industry
 by Mindy Powers

Music has its share of pioneers – acts such as Elvis, The Beatles, and Michael Jackson –  who left their mark by initiating great change in what people listen to. But there’s anotherpioneer that, in the past 10 years, has sparked a revolution in how we listen to music. 

This week, that technological pioneer, Apple’s iTunes, celebrates its 10-year anniversary. So it’s an appropriate time for us to look at how this technology and its successors in the  cloud have changed both the way we consume music and the industry itself.   The iTunes store, which launched in 2003, gave people the ability to buy music one song at a time, with just the click of a mouse. And buy they did – to the tune of  30 million digital downloads in that first year. That number has grown exponentially, and today, iTunes music spans  35 million songs in 119 countries.   Let’s take a look at just how dominant digital music has become for the industry:  

  • Digital music sales continue to rise as CD sales fall. According to NPD’s 2012 music study, CDs saw a 13 percent decline last year. And the shift from CDs to digital music has been several years in the making. In 2000, CDs accounted for 93 percent of music revenue, but by 2010, they dropped to 49 percent.  

  • 44 million Americans bought at least one song track or album download in 2012, according to the NPD music study, a number that has remained stable over the past three years.   And iTunes’ influence in shifting music to digital consumption to has opened up the market to other, cloud-based sources for music, such as Spotify and Pandora. These cloud-based services, which saw a 59 percent increase in revenues last year, offer listeners subscriptions (or are ad-supported) that allow access to vast music libraries that devices such as smartphones, tablets, and even Apple’s iPod otherwise would not have enough space to store.  

Additional impacts of cloud on the music industry:

Music Creation: Cloud technology is used by musicians to share and send media, enabling marketing and self-promotion regardless of geographical location and budget. From song writing, recording and audio engineering to CD design, using software and cloud technology leveled the playing field so that tech-savvy amateurs have access to the same opportunities.  

Music Management: One of the biggest benefits of cloud is its ability to help musicians catalogue, manage and share an inordinate amount of songs that would otherwise be impossible for a single machine. And with high-bandwidth options sound quality is no longer an issue. Streaming digital formats now leads to pristine-quality recordings in seconds.  

What other innovations have paved the way for new business models? How is your organization using cloud technology to affect the bottom line?