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iTunes is Now the #1 Music Retailer

by April 03, 2008

We caught an article over at ArsTechnica today that showed Apple is on top of its game, according to a January 2008 NPD MusicWatch survey that was intercepted on its way through Apple's email system (that's a fancy way of saying someone forwarded it to them.) On top, with 19% of the marketshare is Apple's iTunes. What's so significant about this is that iTunes is an online download service being directly compared to brick and mortar (BAM) stores in the survey. For the comparison, 12 downloaded tracks was equated to a single unit sale at the BAM stores, regardless of whether or not those tracks appeared within a contiguous album or came from the same artist. And they smoked them. This does not bode well for disc media of any type in the future, including Blu-ray Disc. Here is the breakdown of the survey:

Retailer Unit Share
iTunes 19%
Wal-Mart (also Walmart.com, Wal-Mart Music Downloads)
 15%
 Best Buy (also BestBuy.com, Best Buy Digital Music Store)
 13%
 Amazon (also AmazonMP3.com)
 6%
Target (also Target.com)
 5%
FYE/Coconuts (also fye.com, FYE Download Zone)
 4%
 Borders (also Borders.com)
 3%
 Circuit City (also Circuitcity.com, Circuit City Digital Store)
 3%
Barnes & Noble (also BN.com)  2%
Rhapsody   1%
Other  29%

Apple had previously fought its way up top the #3 position, just passing Amazon.com last June. Wal-Mart and Best Buy seemed to have experienced climbs as well, knocking Amazon.com further down the rungs (from #2 to a dismal #4). For Wal-Mart's part, we'd like to attribute this to DRM-free music downloads combined with a cut-back of physical sales and more emphasis on digital music, however this is inconclusive to say the least.

In addition, the survey showed that, of the contents within, 70.9% represented physical media, while 29.1% represented digital downloads. For digital downloads to have increased to nearly 30% in such a relatively short amount of time is an amazing statistic - though one that we're not necessarily happy about due to the lack of quality and proliferation of DRM.

What does this mean for the music industry? According to Ars, and we'd tend to agree with them, album sales are in jeopardy. These numbers, if anything, show an increasing trend of the desire for people to "cherry-pick" their music. Since the entire music industry is centered around the creation of albums, it is likely that this will have far-reaching ramifications that have yet to be understood. The music industry is not easily adaptable, due to their lumbering goliath-like leadership and fear of change. If the way music is produced, organized and disseminated needs to change, look for the independent market - and market forces - to lead the way.

About the author:
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Clint Deboer was terminated from Audioholics for misconduct on April 4th, 2014. He no longer represents Audioholics in any fashion.

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Recent Forum Posts:

dandelion posts on July 27, 2010 06:07
iPhone

I hope I can inject creative innovations into the products, also meets classical music lovers' true needs.

please provide your feedback and critic to me.
gliz posts on April 04, 2008 10:30
Dezoris, post: 396627
It goes well beyond that.
Let say peoples average broadband connection was 1.5Mb.

It would take 4 hours to download a compressed DVD quality movie.
Thats not a big deal, hey users might like setting up a queue of 6 downloads.

How did you arrive at this figure?
MUDSHARK posts on April 03, 2008 22:18
Here I thought Amazon would be number 1 from my purchases filling my music server alone. Never have downloaded likely never will.
abboudc posts on April 03, 2008 21:26
Dezoris, post: 396627
It goes well beyond that.
Let say peoples average broadband connection was 1.5Mb.

It would take 4 hours to download a compressed DVD quality movie.
Thats not a big deal, hey users might like setting up a queue of 6 downloads.

Now times that by 1000 people doing the same thing why not go 100,000 people. Current ISPs like Comcast are banning users for these types of downloading habits. Other ISPs are throttling bandwidth to prevent this.

My point being is we don't have an infrastructure in America to support mass downloading of hi quality, hi-def movies.

We have cable and satellite providers over compressing HD channels do to lack of bandwidth transmission capability.

It costs an extreme amount of money to lay fiber and high end networks in the USA, and its barely getting off the ground now.

So my point being of this whole thing is movie downloads are nothing like audio downloads. You cant compare, streaming or downloading of them and the market is totally different.

Downloading is the future, but so was high definition TV 20 years ago and we still are not there yet.

We're not there, but it's fast approaching. Comcast is to begin offering higher bandwidth (read 50Mbps) residential speeds for about $150/mo. Broadband penetration in the US is over 50% and as everything goes digital - VoIP, TV tremendous profits are to be made for whoever can offer the one fat pipe to the consumer. It wouldn't have to priced like internet today, it'd be priced like internet+tv+phone+?, because that's what it'd be. Verizon and Comcast are already doing this. Granted, it's still compressed, but it won't be for long.
Dezoris posts on April 03, 2008 15:20
gliz, post: 396524
he does have a point about the broadband internet speeds but 1.54 Mbts (T-1) in a home would be enough down download a movie, not enough to stream it As far as speed goes we are behind other countries


It goes well beyond that.
Let say peoples average broadband connection was 1.5Mb.

It would take 4 hours to download a compressed DVD quality movie.
Thats not a big deal, hey users might like setting up a queue of 6 downloads.

Now times that by 1000 people doing the same thing why not go 100,000 people. Current ISPs like Comcast are banning users for these types of downloading habits. Other ISPs are throttling bandwidth to prevent this.

My point being is we don't have an infrastructure in America to support mass downloading of hi quality, hi-def movies.

We have cable and satellite providers over compressing HD channels do to lack of bandwidth transmission capability.

It costs an extreme amount of money to lay fiber and high end networks in the USA, and its barely getting off the ground now.

So my point being of this whole thing is movie downloads are nothing like audio downloads. You cant compare, streaming or downloading of them and the market is totally different.

Downloading is the future, but so was high definition TV 20 years ago and we still are not there yet.
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