According to the analyst company Forrester Research, iTunes is in the midst of a severe decline in sales revenues.
The analysis was based on credit card transactions over a 27 month period. Since January of this year, monthly revenue for iTunes has fallen by 65%.
Nielsen Soundscan is reporting that the problem is not confined to iTunes. There have been three consecutive quarters of flat or declining revenues for the digital download industry as a whole. This is despite healthy growth for MP3 players in the same period.
Forrester noted that the figures could be indicative of a seasonal bounce, but Josh Bernoff, an analyst for the company was quoted as saying that “there’s no indication of enormous growth coming. When you look at this alongside the SoundScan numbers, you may ask ‘Where’s the part were we’re supposed to get excited?’.”
On a side note, Forrester also discovered that the public is not all that happy with DRM downloads. Although CD sales have declined sharply over the last five years, Forrester and Nielsen believe that this decline is not being offset by DRM laden music. This could signal that labels may need to move to DRM-free music in order to survive.
