One has to give credit to Apple for popularizing the online music stores. Many had tried and pioneered the business model before, but Apple was the first to really cut it - accompanied with the neat iPod music player. But now according to the Forrester Group research, the sales figures are slumping.

There are various potential reasons for the decrease. The market trend could be declining as the hype is calming down, and after all the music at iTunes is not very cheap. Also, there are now many high profile compteritors for the iTunes service

According to the cited statistics, since January this year the number of iTunes transactions made each month has slumped 58 percent, while the average size per purchase has registered a downfall of 17 percent, leading to a 65-percent overall drop in monthly iTunes revenue, U.S. market research group Forrester said in a survey among North American consumers.
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Forrester’s recent analysis of more than 2,700 US iTunes debit and credit card transactions reveals that 3% of online households made an iTunes purchase in the past year. Apple’s iTunes proves that $0.99 micropayments for digital music can lead to substantial revenue; buyers spent an average of $35 at iTunes over the past year.

With half of all transactions costing $3 or less, though, transaction fees threaten to make iTunes unprofitable. Since the introduction of the iTunes Music Store, Apple has been steadily selling just 20 iTunes tracks for each iPod sold, suggesting that even at $0.99, most consumers still aren’t sold on the value of digital music.

Source: Playfuls