Apple extends iTunes previews to boost music sales

Apple (NASDAQ:AAPL) will extend the length of iTunes song preview samples from 30 seconds to 90 seconds in an effort to boost flagging digital music sales. "We believe that giving potential customers more time to listen to your music will lead to more purchases," Apple writes in an email sent to its recording industry label partners. Apple adds the change will only impact songs longer than 2 minutes and 30 seconds--clips for shorter songs will remain at 30 seconds.

The iTunes update arrives weeks after research firm Nielsen reported that digital music sales in the U.S. went flat over the first six months of 2010--the stagnation follows on after digital sales increased 13 percent between 2008 and 2009, trailing 28 percent growth from 2007 to 2008. According to a Robert Morris University survey conducted last year, consumers are more likely to purchase music if allowed to sample a track for about 60 seconds and if given access to a "high-quality" version of the material.

The iTunes multimedia storefront accounts for 70 percent of all premium music downloads in the U.S. according to data issued in late May by market research firm NPD Group. NPD notes that iTunes' share of the digital download market has remained essentially flat since the first quarter of 2009, however, increasing just 1 percentage point since that time. Rival AmazonMP3 increased its market share by 4 percentage points, and now represents 12 percent of the U.S. digital music market.

Sales of digital tracks and albums accounted for 40 percent of overall U.S. music market share in the first quarter of 2010, a gain of 5 percentage points since Q1 2009, NPD said. Adding physical music purchases to the equation, iTunes still leads with 28 percent of all U.S. sales, a 4 percent year-over-year leap. Amazon and big-box retailer Walmart are now tied at 12 percent each.

Apple reportedly remains in negotiations with major record labels to introduce a subscription-based iTunes service promising unlimited access to songs for a monthly fee. The New York Post reports Apple's iTunes vice president Eddy Cue has been in talks with the music industry to formalize licensing and pricing--according to one source, the service would offer tiered pricing ranging from $10 to $15 per month, although it has not been determined how much music would be included from tier to tier, nor how long consumers would be able to access the content in question. Labels are said to endorse the idea, and believe it too could re-energize digital music sales.

For more on the iTunes update:
- read this CNet article

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