Tuesday, April 15,2008 @ 10:35am
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.