First published on http://www.morningstar.com/
Apple Inc.’s (AAPL) reported $3.2 billion bid to buy Beats Electronics LLC, the headphone- and speaker-maker and music-streaming company, comes as many experts predict a future without digital music downloads. Downloading music files, they say, has become too cumbersome, restrictive and expensive compared with streaming services. And while Apple hasn’t publicly commented on its intentions with the potential Beats acquisition, industry analysts say it’s a sign that Apple is trying to join the music migration.
Digital music downloads fell for the first time ever in 2013, and have been continuing their slide this year, according to the latest data from Nielsen SoundScan. Digital sales of individual tracks fell nearly 6% to 1.26 billion last year and digital album sales — which typically include 10 songs — were virtually stagnant at 117.6 million in 2013 versus 117.7 million the year before. In the first quarter of 2014, Digital tracks were down 12.5% from the previous quarter at 312 million units, while digital albums were down more than 14% at 27.8 million in the U.S., Nielsen SoundScan found.