iTunes is Now the #1 Music Retailer

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:

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.