Perspective on the digital music download business

Here are some figures from my original post on Strategize that extracted some information from the MacWorld 2006 keynote:

• 14 million iPods sold in the holiday quarter (that’s more than 100 every minute, if you’re trying to do the math); over 42 million iPods sold worldwide to date
• 850 million songs sold to date on iTMS with the expectation of hitting 1 billion in the next few days (maybe they’ll run a 1 billionth song promotion)
• iTMS has an 83% market share
• 8 million videos sold since launch on Oct. 12, 2005

The business2blog puts this in perspective (because the numbers above seem damn impressive at first blush):

• Number of songs sold on iTunes in the past three years: 850 million.
• Number of songs traded on P2P file-sharing networks during the same time: 90 billion
• 850 million iTunes songs/ 42 million iPods = 20 songs/ iPod.
• Over three years that comes to people spending an average of $7 a year on music at the iTunes store.

The numbers that Business 2.0 are reporting come from a company called Big Champagne, which is a service that tracks P2P music volumes — it’s a service that lots of us in the music business subscribe to and that we pay a lot of attention to.

Here’s a quote from Eric Garland at Big Champagne regarding the stats on the Business 2.0 post:

People do not buy music from Steve Jobs. That is fine with Steve Jobs.  He is not in the music business.

How easy it is to forget that Jobs is not in the music business.  If you had just read the stats from his MacWorld keynote, you would forget that Jobs is not in business to sell music, he’s in business to sell hardware, namely to sell iPods.  It’s important not to forget that.

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