iTunes Store Turns 20: No Longer First Choice

This article is published in collaboration with Statista

by Felix Richter

When Apple launched the iTunes Music Store (later iTunes Store) on April 28, 2003, it was the result of long and hard negotiations between Apple CEO Steve Jobs and the five major record labels. Having seen how popular illegal downloads of single tracks were, Jobs had pushed for a legal, yet simple way for consumers to buy singles online. He ultimately got the labels to agree on the 99-cents-per-song model, which revolutionized the music industry and marked the beginning of the end of the CD and the album format.

Five years after it launch, the iTunes Store had become the largest music retailer in the United States, and in February 2010, Apple announced that 10 billion songs had been downloaded from what was then “the number one music retailer in the world”. After bringing movies and TV shows to the iTunes Store in 2006, it remained the number 1 choice for Americans looking to buy digital music, TV shows or movies online for many years.

20 years later, that is no longer the case, as streaming services did to the iTunes Store what it once did to brick-and-mortar retailers. Transaction-based music, movie and TV show sales have been declining for years, as streaming services such as Netflix, Spotify, Apple Music and Amazon Prime Music/Video have become consumers’ go-to source for digital entertainment. According to findings from Statista Consumer Insights, just 25 percent of Americans who paid for digital music in the past 12 months did so on the iTunes Store. In terms of video, the competition is even further ahead, with just 13 percent of digital video users, spending money on the iTunes Store in the last 12 months.

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