In another sign of shifting mobile music consumption, over-the-air downloads at Verizon Wireless were flat last quarter even though wireless subscribers grew. Tucked away in Verizon’s earnings report on Tuesday was a mention that audio and video downloads totaled 38 million units in Q4 2009 while retail wireless subscribers increased 1.4% to 87.5 million.

The most notable aspect of Verizon’s over-the-air downloads is that the quarterly total has gone down 24% while the number of retail subscribers has grown 25%. Verizon reported 50 million downloads in Q4 2008, its highest point since the company started breaking out music and video downloads in Q2 2007 (before that it aggregated music, video, games and other content into one number). At the time, Verizon’s had 70 million retail subscribers. The company’s acquisition of Alltel in January 2009 helped push retail subscribers to 84.1 million. But downloads had already started to drop and have not recovered.

While downloads have dropped, streaming has crept along. In Q2 2008, the company launched V-Cast with Rhapsody. A $15-per-month music subscription service was launched the following quarter. While Verizon does not break out those numbers, no indication has ever been given that the service has achieved more than moderate success. The lack of downloads resulting from the streaming service is an indication the service is failing to engage users. We do know RealNetworks was able use Verizon music subscriptions to offset its drop in online music service subscriptions (as detailed in RealNetworks’ Q3 2009 10-K).

In the meantime, free alternatives like Pandora and Slacker have grown in popularity. Both are available for a variety of phones, including Blackberry devices.