Trouble With iTunes, and More On San Diego Opera

WHEN it comes to the collapsing sales of recorded music, and subsequent loss of revenues for musicians, I go back and forth between blaming the record labels for dropping the ball, and seeing the revolution of digital music as relentless and unstoppable. Either way, musicians have been the prime casualty. But it looks like one of the most successful of the disruptors — iTunes — is having trouble now as well. It’s a bit like the way the bookstore chains came into town and forced out the local independent, and then found themselves, a few years later, displaced as well.220px-Stratocaster_detail_DSC06937

As downloads have fallen, Apple has tried to earn revenues back with its streaming service iTunes Radio, but that seems to be limping along, and it could lead to a massive redrawing of iTunes itself. A new article in Wired describes the uncertainty at Apple — there don’t seem to be firm plans yet, just a sense of crisis. It also provides some useful history:

In September 2011, Apple took a tentative step towards streaming, launching its Match service, which charges $25 a year to store music from CDs and music bought from iTunes in the cloud, but so far only has about 1 million subscribers, according to label sources. Last September, Apple took a bigger step into streaming with iTunes Radio. The idea was to execute a smooth transition to streaming, while preserving sales via referrals to its download store. While it’s estimated to have become the third-largest pure music streaming service after Pandora and iHeartRadio, according to Edison Research, iTunes Radio has yet to live up to its promise of shoring up sales, said sources familiar with the conversion rates. Even the leading U.S. streaming radio Pandora with over 70 million users each month only generates just $3 million in download sales a month according to executives familiar with the data.

Google and the Android seem to be the most deadly threat right now. To be clear, iTunes did not aim to destroy recording revenues, and it came along after Napster and the unleashing of music piracy; call it a second-wave disruptor, perhaps. But now it may be going from challenger to incumbent.

From where I sit, it’s more proof that the record industry is not making a transition to a new model, one that will allow a decent number of musicians to make money from their work, but rather is experiencing a series of disruptions. And if I may paraphrase Paul Krugman, people talk about how exciting creative destruction is until they realize they realize they are the ones being destroyed.

ALSO: I don’t think I’m alone in getting whiplash trying to follow the saga of San Diego Opera. The latest seems to be that the board may save the group in some form. If that sounds vague, board president Karen Cohn said in a statement: “We are exploring every possible idea for creating an economically sustainable way to preserve the current opera company in some form. And if that proves to be impossible, we all stand ready to do whatever we can to help preserve opera in a new form for San Diego.” Got that? More here.

FINALLY: A reminder again about my panel at The Los Angeles Times Festival of Books at USC. “The Artist as Influencer” takes place Sunday at 11; we’ll talk about Jack Nicholson, Elliott Smith, Mark Twain and others. Hope to see you there.

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