NPD: Amazon MP3 has no impact on iTunes

Amazon's highly-touted MP3 store has had little to no effect on the success of iTunes, according to a new analysis by The NPD Group. A study conducted by the group reveals that just 10 percent of all purchasers at Amazon MP3 are converts from Apple's service, with the rest either switching from other stores or else are new to direct-download music. This comparatively new audience is a "healthy indication" that other stores don't necessarily have to draw customers away from iTunes to grow, says NPD entertainment analyst Russ Crupnick.

The attention to a newer buyer group nonetheless poses a challenge to Amazon. The online retailer sits in fourth place among all US music sales and claims just a tenth of the sales volume at its online store, the study notes. Amazon will need to significantly increase its digital sales rate to surpass higher-ranked stores, which includes both Best Buy and Wal-Mart.

Amazon has chiefly drawn on its connection to its established CD sales business to boost its business and also touts the cross-platform nature of its store, which sells copy protection-free tracks playable on iPods and Zunes but can be accessed from most modern operating systems using a web browser. Cost has also been cited as a success factor, with some songs selling for 89 cents.

Apple has primarily relied on its song catalog, which is roughly 33 percent larger, and the tight integration of its store with the iPhone and iPod.

Filed under: industry
Other story tags: iTunes, Best Buy, Wal-Mart, Amazon MP3

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222102 04/15, 11:07am, EDT no surprise here

The roughly 10% people who supposedly 'switched' from iTunes may represent download-savvy iTunes users who wanted to check out the new Amazon store (myself included). Many of us have no intention of abandoning iTunes, as the difference is very clear between them and Amazon is just clunky. Effort is required to browse through it and find what you want/like. ITunes is effortless.

As I said, no surprise here.

posted by vasic

222108 04/15, 11:39am, EDT agreed

iTunes is a comfortable place. For me it comes down to three things: 1. Availability, 2. DRM, 3 Price. I go running to Amazon if they have it, and it is DRM'd on iTunes and/or if the price is $1 or more lower than ITS.

posted by JackWebb

222169 04/15, 5:57pm, EDT I am part of that 10%

I will always buy from Amazon first if both stores have the song I want, even if iTunes has it as an iTunes Plus (more expensive). I only use iTunes when it is absolutely necessary....DRM = EVIL

posted by lamewing

222201 04/15, 9:43pm, EDT I > Apple

I use iTunes all the time because I really enjoy not being able to share music with friends. That way all the songs I buy are like the guns from Judge Dredd and only I can wield them. I also really like being part of mac culture. It makes me feel cool. Like that guy in the commercials dating Tom Green's used goods. He's a dork, but he's cool because he makes Microsoft look bad. Let's just hope this story ends better than jeepers creepers.

posted by luckyday

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