Ignore Apple Watch, the digital timepiece launched this week with the ambition to become next year's must-have personal toy. If you are a consumer technology watcher, the news is not the launch of yet another communication gizmo. The real story is the steady decline in sales at iTunes, the company's music download business and the weird explosion of interest in the niche market for vinyl records.
Downloading is dwindling; as a means of consuming music, it has had its day and industry pundits reckon it will follow compact discs in an accelerating death spiral. Half-year figures from Nielsen, the music industry's data collator, show that digital album sales in the U.S. declined by 12 per cent. iTunes is not being spared; according to analysts at Morgan Stanley, spending by the 800 million iTunes accounts averages a mere $3.29 (U.S.) over three months, down by a quarter from the previous year. Music listeners are quitting iTunes in favour of subscription streaming services, such as Spotify. In the first half of the year the volume of streaming music on-demand was up 42 per cent, reckons Nielsen. More startling is the growth in vinyl albums where sales are up 41 per cent in the same period.
Since 2007, sales in the U.S. of vinyl LPs have increased more than sixfold to six million units. In Canada, sales of the pressed plastic discs rocketed by more than 50 per cent last year. It's not just reissues of classic Rolling Stones and Hendrix albums; the top-selling recordings are indie bands, such as Daft Punk. Seemingly oblivious to the additional cost, young music fans are flocking to an old analog technology, spurning the simple attractions of fast and cheap digital signals over the Internet.
The vinyl renaissance is still a niche business: the six million vinyl albums sold in the U.S. last year represent just a few percentage points of the total market but the rate of expansion is impressive and it is driven by two powerful influences at both ends of the market. Musicians are angry about the tiny income they earn from digital music; a typical rate for an artist might be half a cent for a single paid-for streaming. Meanwhile, many music lovers are rejecting the sanitized, cleansed sound of digitized music and are warming to the old analog world.
Music is about waves, vibrations that collide with your ear drums or cause a stylus to tremble in a groove carved into a disc. Provoked by the sight of a friend's teenage son toting his new vinyl purchases, I unearthed my own collection from a crate and bought a new – surprisingly cheap – turntable. It was a revelation to hear for the first time after more than three decades, the piercing voice of Debbie Harry, bouncing off the walls of a studio, free of digital cleansing and twaddle.
And a vinyl album exists in the real world. Vinyl LP covers have become iconic art works and you can give them away or inherit them, free of the risk that some hideous corporation will deny your ownership of the digital signal in your computer's memory. Printed books are the vinyl of literature and it was predicted that e-books and the Amazon kindle would bury ink on paper. The convenience and cheapness of downloading would finally extinguish the technology of Gutenberg. But it just isn't happening.
After several years of massive growth, revenue in the U.S. from sales of e-books was flat in 2013, according to Bookstats. The apparent loss of momentum in 2013 was in part due to the sales contribution in 2012 of the housewife porn phenomenon, Fifty Shades of Grey, a product designed for discreet download. Publishers are discounting e-books aggressively but they earned $3-billion from the segment last year in the U.S. out of total sales of just under $15-billion, a static market share, year-on-year. Interestingly, the e-book share of childrens' publishing fell from 14 per cent of the total in 2012 to 11 per cent last year. It seems that parents and children just love turning those cellulose pages.
The consumer market is becoming saturated with digital delivery. E-sellers are becoming dumpers of a commoditized product and they are compensating for the lack of quality with cheapness and immediacy. Smart consumers have noticed; hence the slowing e-book trend and rocketing sales of vinyl records in a saturated, shrinking music market.
It would be a foolish person who gave the thumbs-down to a new Apple gadget at its first outing. The tide of recent consumer and corporate history is against it. Yet, strange things are happening outside global HQ in Cupertino, Calif. The marketing wizards at Apple would like to transform the fusty old portable timepiece into a multifunctional device that connects you to the world. The trouble is that a lot of people just like beautiful clockwork jewellery.