Why Apple needs iTunes Radio

WWDC iTunes Radio

Attitudes toward music ownership have shifted drastically over the last few years. And a report published Friday by Nielsen showing the number of music tracks downloaded versus streamed in the U.S. makes it very clear why Apple, which upended the music business a decade ago with its iTunes Music Store, had to start its own streaming music service.

The Nielsen Entertainment and Billboard’s 2013 Mid-Year Music Industry Report, which tracks music downloads, streams, radio plays and physical album sales from Dec. 31, 2012 to June 30, shows digital song sales are actually down 2.3 percent through the mid-point of this year: 682.2 million in 2013, versus 698 million a year ago. Meanwhile, digital streams of music are up 24 percent.

The comparison of the top 10 digital song sales versus top 10 song streams tells you all you need to know about the importance of music sellers such as Apple getting into streaming:
Soundscan 2013 YTD streaming vs downloads

iTunes Radio is coming to U.S. customers this fall as part of iOS 7 — though it will also work on OS X, Apple TV and Windows. It will be free to use but will carry ads. Meanwhile, Google also recently launched its own streaming music service, Music All Access,┬ávery likely for the same reason: streaming music is hot right now.

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