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Apple has doubled the global territorial footprint of its iTunes Store by launching the music service in 56 more countries — a move that will bolster the digital download format further in the face of rising competition from streaming services.
Apple(s aapl) announced the new availability in the fast-growing markets of Russia, Turkey, India and South Africa plus 52 other countries, almost doubling availability to 119 countries.
Although growth in U.S. sales of individual track downloads has slowed dramatically, labels have this year cited iTunes Store’s arrival in Latin America in January 2012 as driving a new expansion in sales of the format.
Therefore, I expect the service’s launch in an even larger tranche of fast-growth markets to bring even more buyers for the tracks — and, as a result, bring new money to a music format that many nevertheless consider tired.
Although labels in the west last year began embracing new mobile and subscriptions services like Spotify as an alternative to the iTunes model, on which they were dependent and which has slowed down, they should specifically welcome its launch in these overseas markets.
That is because many of these markets are underperforming, lacking significant digital customer bases and even royalty structures to make the sector tick.
As I reported this year…
- The Russian market is crying out for an effective legal digital music service — physical sales there are in precipitous decline, but even digital sales fell by 40 percent last year, to 2009 levels, and the labels say the country “is currently being held back by a culture of copyright infringement“.
- In South Africa, only 14 percent of music services pay royalties for the tracks they sell; ISPs and mobile operators stand accused as pirates and there isn’t even a relevant category for artists to benefit from streamed and webcast plays, according to a government report.
- Turkey, meanwhile, is Europe’s fastest-growing internet market, with very high engagement levels.
iTunes should significantly improve this situation — and that is good news for Apple and good news for labels.
But a complete repertoire is not yet in place in all markets, with iTunes’ delayed Russian launch reportedly still not benefitting from complete catalogue agreements.
And, in each of these new territories, the outfits will have to forgo the same level of money they have been pulling from downloads in established markets. Pricing varies at rates like 15 rubles ($0.48) per track in Russia and seven rupees ($0.12 in India), compared with the $0.69 to $1.29 charged in the States.
I wrote in September how, while Apple could well introduce an unlimited-access service to rival Spotify, it need not do so until that model has proved itself and until downloads start tanking. This coming new growth in downloads makes that tanking less likely.