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iTunes briefly tops Wal-Mart as No. 1 in US

updated 09:30 am EDT, Thu April 3, 2008

iTunes Tops Wal-Mart

iTunes for at least a short while has been single largest outlet for music sales in the US, according to new data collected by The NPD Group's MusicWatch Survey conducted in January. The digital store at the time accounted for 19 percent of all music bought in the country versus 15 percent for Wal-Mart's combined in-store and online sales. Best Buy managed 13 percent, while Amazon sat further back at 6 percent despite offering the second-largest digital store in the US. RealNetworks' Rhapsody was the second digital-only store in the market but commands just 1 percent of the US marketplace.

The revealed statistics follow just weeks after NPD had declared iTunes second place in the market, suggesting that the results were a temporary spike in sales rather than a definitive victory. Predictions by NPD had only called for iTunes to overtake its immediate challenger sometime in 2008. On making its estimate, the research group had assumed a cautious approach which would see Apple grow at only half its rate of the time.

News of the at least temporary shift in top rankings puts increasing pressure on physical retailers, many of which have seen CD sales plummet with download sales increasing at a slower overall rate. The MusicWatch study estimates that just 29.1 percent of all purchased music in the US is downloaded and thus isn't yet capable of compensating for a decline in CDs through absolute value.

The results also complicate a larger movement towards removing digital rights management (DRM) from downloads to allow wider fair use of purchases. Although all four major international record labels have offered DRM-free music on Amazon MP3 and other online stores to varying degrees, only EMI from these has so far been willing to do so with iTunes. Rival labels such as Universal and Warner are believed to be deliberately withholding DRM-free songs from iTunes in an attempt to undermine its dominance of the market, but initially appear to be unsuccessful with iTunes momentarily assuming the top spot.



By Electronista Staff
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Comments

  1. bjojade

    Fresh-Faced Recruit

    Joined: Jun 2007

    0

    Who would have thought?

    Who would have thought that the overpriced boxy little iPod just a few short years agowould have this much impact on the industry?

  1. Deal

    Mac Enthusiast

    Joined: Apr 2001

    0

    Can you imagine...

    What other industry in the world would withhold something, that costs them nothing, from their potential largest retailer; only to inhibit sales through that vendor?

    Imagine Twinkies being delivered in steel boxes, so as to be difficult to open, only at WalMart, specifically to inhibit the sales of their product through WalMart.

    Now, that would make a lot of sense, uh? Only in the music industry.

  1. Flying Meat

    Junior Member

    Joined: Jan 2007

    0

    uhhh, what?

    "The MusicWatch study estimates that just 29.1 percent of all purchased music in the US is downloaded and thus isn't yet capable of compensating for a decline in CDs through absolute value."

    Surely they are referring to the "absolute value" to the music industry and not the customer.

  1. pysan

    Fresh-Faced Recruit

    Joined: Sep 2000

    0

    Junk

    Perhaps if they did not fill the CDs with so much clutter junk, they would not be looking at such a drop when people switch to digital when they can choose individual tracks.

    All the previous music formats required albums, outside of the relatively few singles, so of course it was album sales that were the big ones, because that was all there is.

    But that math doesn't hold up when you then can buy only the tracks you really want, as the filler is now ignored, so perhaps we are now seeing just how much REAL value all those albums actually provided, versus a perceived "drop" in the total music purchased.

  1. Peter Bonte

    Fresh-Faced Recruit

    Joined: Aug 2001

    0

    Amazon mp3

    We hear a lot about the Amazon MP3 store but how much digital music did they sell? A lot of number juggling but no raw sales figures. :/

    5 % of the digital market or less?

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