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Amazon MP3 fails to budge iTunes US share

updated 02:20 pm EST, Mon December 15, 2008

Amazon MP3 Market Share

Amazon MP3 has managed to glean a significant slice of the US digital music market but hasn't had a noticeable impact on iTunes, new data passed on to the WSJ by music executives suggests. Although Amazon hasn't yet published data that would confirm latest numbers, both label officials and new Billboard information point to Amazon having as little as 5 percent and as much as 10 percent of the market while Apple's store continues to have 70 percent or more. The lack of change for iTunes indicates Amazon having taken share from rivals rather than upsetting the incumbent leader.

The percentage also points to relatively little gain over Amazon's first year in the market despite advantages over others. The store launched last fall as the first real music store to offer unprotected music from all four major labels and so is one of the few to supply paid online music that can be played in iTunes and iPods as well as rival players.

While never publicly confirmed, concessions made by Universal Music Group to Amazon over unprotected songs and pricing are commonly believed to have been part of a campaign against Apple pressuring it to loosen its market share grip and allow flexible pricing. In this view, Universal has been consciously withholding less restricted music from iTunes while giving it to not just Amazon but also Walmart and other competitors in the hopes that one or more would make significant inroads.



By Electronista Staff
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  1. MhzDoesMatter

    Fresh-Faced Recruit

    Joined: Jul 2002

    +9

    Hate to tell you but....

    Contrary to all the nerds postings around the net, it's not DRM. Sure iTunes DRM is "bad" the way taxes are "Bad." But it's not so bad that anyone would choose an alternative because of it. The only thing that could unseat itunes is something "better" than itunes. Not "less restrictive".

    Comment buried. Show
  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    -12

    Price competition

    I thought that Amazon and Walmart could put the screws on iTunes in terms of price competition and DRM-free music if people could conveniently compare the major pay-per-song download services. So I created a website called DownloadShopper.com (www.downloadshopper.com) that lets you compare prices side-by-side for songs and albums between iTunes, Amazon and Walmart. Hopefully this empowers people to realize that there's more out there than just iTunes bring some competitive heat to Apple.

  1. vasic

    Fresh-Faced Recruit

    Joined: May 2005

    +2

    RIAA Alert!

    Our Guest here, masquerading as someone looking for consumers' best, is trying to make sure RIAA gets what it wants: to dethrone iTunes from No. 1 spot in the US.

    There is only one reason Amazon and Walmart (and others) are getting these sweet deals from the labels (including Universal): the deals are good ONLY until Apple is dethroned. Once the combined forces of Amazon, Wal-Mart and others manage to sell more than Apple, new deals will be put in place. No more unrestricted music, no more cheap single downloads. We'll see the return of the Album, bundling, packaging, restrictive, or "premium" pricing. Consumer choices will remain with Apple, until Apple's iTunes disappears.

    Fortunately, nobody really bothers to go to our Guest's site. People use iTunes despite Amazon's DRM-free content. They use iTunes because it's most convenient, most practical and seamlessly integrated into their iPod/iPhone experience.

    Anyone who purchases Amazon tracks is helping RIAA in its quest to limit consumer choice and maximise their own profit at the expense of the consumer.

    Hopefully, this battle will soon be over, the labels will capitulate and let Apple remove DRM from ALL their tracks. The wait shouldn't be long.

  1. dynsight

    Fresh-Faced Recruit

    Joined: May 2005

    0

    Itunes first,

    When something interesting catches my ear, I will first check iTunes plus. If present, I will buy. If not, I will go to Amazon. Sorry.

    I hate the DRM and find it an inconvenience.

    The quality of the itunes track is a bit better, as I noticed when listening to subsequent tracks on my iPhone with iMuffs (decent quality). i do note the source, and the iTunes purchased songs tend to be clearer and crisper within the same genre or even artist (The Capitol Years I have purchased from both, as well as Steely Dan and STP). Qualitatevely, the iTunes tracks seem to be better, with or without DRM.

  1. lamewing

    Dedicated MacNNer

    Joined: Aug 2004

    +1

    who cares

    I buy CDs to avoid this nonsense. Heck, I buy import CDs to avoid the U.S. music scene as a whole.

    In regards to Amazon and the like; they don't need to unseat Apple. As long as they make a profit, they will be golden.

    Now who will unseat Apple's iTunes Store and the iPod? Apple, of course. Just as Sony shot themselves in the foot by refusing to embrace digital music early on...and basically ending the Walkman name in the U.S...Apple could do something similar if they let their hubris get the best of them.

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -4

    Apples to Windows

    Has anyone compared Apple and mp3s to Microsoft and Windows? A lot of striking similarities. Its amazing that any company with a huge market share ain't much different than the rest.

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    -6

    Apples to Windows

    Has anyone compared Apple and mp3s to Microsoft and Windows? A lot of striking similarities. Its amazing that any company with a huge market share ain't much different than the rest.

  1. chas_m

    Moderator

    Joined: Aug 2001

    +3

    Amazon = needs work

    I would buy from Amazon, esp. when they have an album on sale. But after downloading their special MP3 downloader (WTF?!) only to discover it doesn't work in Canada (WTF??!!!), they lost a customer, at least for the time being.

    Oh, did I mention the MP3 downloader opens an "ad hole" in Safari? And that there's no uninstaller? Nice.

    I'm with dynsight, sort of. I will try to buy iTunes Plus first and foremost, but if that's not available I will buy the CD if I can find it used or on sale for less than $10. Won't pay more than $10-12 for any normal CD, period end of story.

    PS. 256kbps AAC sounds better to my ears than 256kbps MP3. Not that there's a huge difference, but it's enough to make a difference.

  1. nat

    Junior Member

    Joined: Mar 2002

    0

    striking similarities

    indeed. not much different eh? one difference, ms is late to EVERYTHING and copies, bullies and buys their way into the market.
    it is so very very strange that ms, very late to the game, put up something that is so similar to the leader. yep, strange indeed.

  1. luckyday

    Fresh-Faced Recruit

    Joined: Apr 2008

    0

    Nat

    I don't appreciate you talking about multiple sclerosis like that. It's just sick.

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