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Several industry observers, comScore and Piper Jaffray, report on iTunes' surging performance in the digital music market. The news contrasts with reports from Forrester on iTunes' purportedly dwindling sales. Forrester's dubious assertion has caused some to question the viability of DRM-based business models. However, in a conceding response to comScore and Piper Jaffray, Forrester has a post on its site titled "iTunes sales are NOT plummeting! Press credibility, on the other hand ..." Excerpts from comScore's site: comScore and Piper Jaffray Agree that iTunes Sales are Surging
comScore Networks... today reported that revenue from... iTunes digital media download service rose by 84% during the first three quarters of 2006 versus the same period one year ago as a result of a 67% increase in the number of iTunes buying transactions and a 10% increase in the dollars spent per transaction...
...the comScore analysis found the number of people using the iTunes service has also increased. The iTunes application attracted 20.8 million unique visitors in November 2006, up 85% from November 2005...
comScore’s findings align closely with a report from analyst Gene Munster of ...Piper Jaffray, who wrote in a research report that the number of songs sold per week on iTunes had risen 78% in the first nine months of 2006 compared with the same period in 2005. "Contrary to recent reports suggesting sales on iTunes are declining rapidly, our analysis of Apple company data shows strong growth year over year... With less than 5% of music purchased online, this market will go through massive growth in the next several years," In Forrester's defense, market research is a very difficult field. Forrester, whose research I have used extensively, is a very reputable source for industry information, and will continue to be. However, given the latest news, while alternatives to common DRM-based business models may grow in importance for iTunes competitors as they seek to expand their market to iPod users, it is most likely that Apple and other major digital entertainment businesses will continue leveraging DRM.
posted by Noel Le @ 8:05 AM | DRM & Watermarks, etc., Markets: Business, Investment & Innovation
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