Inside Move: iTunes data puzzling

Report says music store's sales declined 58%

Is Apple’s iTunes Store in a freefall?

Tech media outlets have been abuzz this week over a report from Forrester Research that iTunes music sales declined 58% from January through May.

But is it meaningful? Turns out Forrester has no idea. With only two years of data for its limited survey sample, research house admits it doesn’t know how much of that dip represents normal seasonal change, as those who get a new iPod for Christmas likely go on a buying spree in January.

Other numbers certainly contradict the notion that iTunes is suffering. Through this past Sunday, SoundScan reported digital music sales are up a very healthy 57% over 2005, and iTunes remains the dominant musicstore in the U.S., with about 80% of the market.

Apple reps have denied sales are slowing.

Study actually spends more time on a point already well known to industryites: The average iPod owner isn’t spending that much on iTunes.

Forrester estimates iPod owners buy an average of 20 songs from iTunes.

Apple makes most of its profit from iPods, not iTunes, so that’s probably not a big concern to Steve Jobs. Diskeries may be more worried, although that depends entirely on whether iTunes sales are an additive for the industry or whether those sales are outweighed by people buying iPods and filling them up with pirated music.