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Here, Again, Is Why Apple Bought Beats Music

The music download era is over, replaced by streaming.

Asa Mathat
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

For a very long time, any report on the state of the music business sounded like this: Digital download sales are rising, but not enough to make up for the drop in CD sales.

Here’s the new version: Music streaming is rising, but not enough to make up for the drop in CD sales — and the drop in digital downloads.

You want your glass half full? No problem — just ignore the still-withering physical music business. Now you can say this: Online music stores like iTunes are seeing sales drop — but those revenues are being replaced by the boom in streaming services like Spotify and Pandora.

Here’s the data, via the Recording Industry Association of America, the U.S. trade group for the music labels.

The music labels’ overall sales dropped another five percent, to $3.2 billion, in the first half of the year:

And download sales, which stalled out a couple of years ago, are now in free fall as well, down 12 percent. But the rise of the streaming business — which may well be causing some of the download decline — canceled that out.

One take-away: If you had any doubt that Apple has big plans for the Beats Music streaming service — whether it rebrands it, rebuilds it or something else — this should clear that up. Apple doesn’t have any choice.

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