For Media & Entertainment Professionals

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	December 6, 2006 Few iPod Owners Are Big iTunes Buyers by Josh Bernoff with Remy Fiorentino	Average: 9  (3 ratings)

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Executive Summary

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.

TABLE OF CONTENTS

• iTunes Revenue Is Dominated By A Large Number Of Small Transactions
• Apple Sells Just 20 iTunes Tracks For Every iPod Shipped

WHAT IT MEANS

• Digital Music Is A Tough Market — Even For The Clear Leader
• Supplemental Material
• Related Research Documents

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