iTunes Store Buyers Few & Far Between

While not necessarily surprising, it is an eye opener in many ways. Much as I like the convenience of buying on iTunes, the limitations of the files - how many devices they can go on, how many times they can be burned, the fact that there is rarely downloadable packaging included - certainly deter me from making it my primary source for buying music. That, and I have a great record store (Grimey's New & Pre-Loved Music) 5 minutes away.

Forrester: iTunes Store Buyers Few & Far Between

Apple created a paid download market, and the iTunes Store remains a bellwether for the sector. But according to a recent Forrester Research report, the number of iTunes buyers is actually quite low. The study, released this week, found that just 3 percent of households in the United States have made a purchase from the store. Those buyers spent an average of $35 a year, according to the report, and about $3 per session. The report also pointed to low per-iPod paid download levels, a sore spot for labels. "Since the introduction of the iTunes Music Store, Apple has been steadily selling just 20 iTunes tracks for each iPod sold, suggesting that even at $0.99, most consumers still aren't sold on the value of digital music," the report asserted.

The finding, culled from 2,700 iTunes credit and debit card purchases, is hardly surprising. For Apple, the iTunes Store itself is mostly a sideshow, at least financially. Meanwhile, heavy-selling iPods are the real financial breadwinners, powering billions in revenue gains for Apple. And most iPod buyers stuff their devices with thousands of tracks pulled from CDs or downloaded from P2P networks. For labels, that raises some serious issues about the long-term revenue potential of the paid download market, especially as iPod sales continue to gain. Since its debut in May of 2003, the iTunes Store has powered rapid year-over-year increases, though week-to-week gains have been mostly flat this year. Apple has sold a cumulative 1.5 billion downloads since its debut.