iTunes dominates U.S. music sales

Posted by Nino Marchetti, Wolfgang Gruener

Cupertino (CA) – Earlier this year, there was an indication that iTunes may surpass Wal-Mart as the largest music retailer in the U.S. Back then, however, iTunes was believed to have achieved this result through an increased Christmas gift card business. It appears that iTunes was able to gain additional market share since and has officially become the largest music retailer.

According to market research firm NPD, Apple’s iTunes Store continues to be the dominant force of overall retail music sales (downloads and physical CDs.) NPD found that iTunes was leading the top 5 music retailers here in the U.S., followed by Wal-Mart, Best Buy, Amazon and Target.

Amazon rose from fifth to fourth based upon a combination of its online CD sales, which have seen less loss of sales compared to CDs sold at brick-and-mortar stores, and the launch of its digital music store last year. NPD noted there continues to be a shift away from physical CDs to digital music, which accounts for in many ways why iTunes is at the top.

"We expect Apple will consolidate its lead in the retail music market, as CD sales continue to slow," said Russ Crupnick, entertainment industry analyst for NPD. "Amazon’s CD buyers tend to be older, so they haven’t abandoned the CD format to the extent seen in the average music buyer. Plus Amazon’s successful introduction of its digital download store will help the company improve its position in the future."

NPD said that its research results were derived from surveys of U.S. consumers, age 13 and older, reporting on their purchases of physical product (CDs), digital music, and wireless over-the-air (OTA) transactions, excluding ringtones.

NPD did not provide further details about its findings and declined to disclose any market share numbers. Back in April, a leaked document suggested that iTunes had posted a 19% market share in January, followed by Wal-Mart with 15%, Best Buy (13%), Amazon (6%), Target (5%), FYE/Coconuts (4%), Borders (3%), Circuit City (3%), Barnes & Noble (2%).