“Apple’s iTunes will likely whip past Wal-Mart Stores to become the largest U.S. music retailer sometime this year,” Greg Sandoval reports for CNET.
“The NPD Group issued a report Tuesday that said Apple had outpaced Best Buy and Target to become the No. 2 U.S. music retailer. Unless the downward trend in CD sales suddenly reverses, Apple will be No. 1, said Russ Crupnick, the NPD Group’s president of Music,” Sandoval reports.
“‘Digital sales were up close to 50 percent and CD sales were down 20 percent last year,’ Crupnick said. “‘Even at half that growth rate in digital sales, Apple will in all likelihood catch Wal-Mart this year,'” Sandoval reports.
“In the offline world, there is a sort of death spiral going on, Crupnick said. As CD sales continue to slide, retailers like Wal-Mart, Best Buy, and Target devote less and less floor space to discs–which of course serves to erode sales even further,” Sandoval reports.
“According to the report issued by NPD on Tuesday, nearly half of all U.S. teens (48 percent) did not purchase a CD last year. That is up from 2006, when about 38 percent of teens made no CD purchases,” Sandoval reports.
“The music industry should follow Apple’s lead and direct their attention to teenagers, Crupnick said. Teens lack credit cards and this often prevents them from buying at almost everywhere but iTunes, Crupnick said. Apple avoids credit cards by pushing the gift cards, which teens can pay for at retail locations and then use them to purchase songs online by keying in a code. No credit cards needed,” Sandoval reports.
More in the full article here.
[Thanks to MacDailyNews Reader “Oh no my shorts” for the heads up.]
with Apple moving into the catbird seat it will be fun to see how their bargaining position with respect to the Big Four recording companies changes.
When these business success are realized the stock is going to move back up to where it was a couple of months ago. Who would have dared suggest that Apple would be this successful a couple of years ago? Oh maybe, SJ.
And without the WMA format or the clean up of vomit on aisle nine.
charlie, see the joy of tech comic today, there on the left of your comment.
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Where does Amazon rank? They have DRM free music right?
Perhaps the Music Cartel’s plan against Apple still isn’t working…
i love the attached add, “iTunes gift cards”
it’s as if the adds even want Apple on top. Better yet, buy your gift card at k mart for that double dose of wal mart slappin
What are they talking, how does not having credit cards prevent teens from buying music? Name one music retailer that does not accept cash.
If anything, not having a credit card makes buying music on iTunes more difficult.
Great job Apple. #1 soon.
Although I heard from Zune Tongued In The Butt that Microsoft Zune Marketplace will be #1 real soon. I mean they must be selling a bazillion of these players by now right?
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@shen:
Thanks. Great laugh. I voted for the last of the eighth reason and saw I was with the majority.
@UltraVisitor:
I think that the article compares iTunes Store with other _digital_ merchands (like Amazon), not big box merchands.
The last part of the article doesn’t make sense. Teens don’t have a credit card to buy a CD in the store, but…. they can buy an iTunes gift card in the store and use that. So what do they buy the gift card with? If they can afford to buy a gift card, they should be able to buy a CD.
How about the fact they don’t want a CD. (insert MDN standard rant here)
With iTunes, these teens who more than likely live at home will use their parents cc to buy music. Now THAT is easier than going to the store to even buy a gift card.
Ding! Dong! The CD is dead! The wicked CD is dead!
In the words of that kid from the Simpsons: “Hah hah!
And next year Zune Marketplace will replace I-Tunes Store as the number one music retailer.
Points, FM Radio, Brown. It’s all coming together for Microsoft and Apple is left in the dust. Again. Think different, MAC lemmings and stroll on down to Zune Marketplace—oh wait—Zune Marketplace doesn’t work on a MAC. Losers.
Your potential. Our passion.™
Zune Tang is right. It’s all over.
Give the money back to the shareholders, draw a line under this whole sordid affair and move on.
Let’s not give Zune Tang the time of day. Everyone needs to start ignoring his comments. He and Steve Ballmer share a striking resemblance. Do we give Ballmer the time of day? NO
“Do we give Ballmer the time of day?”
We don’t have to. He’s in the process of buying up the world’s daylight hours in a hostile takeover.
“Teens lack credit cards and this often prevents them from buying at almost everywhere but iTunes…”
When did Walmart stop accepting cash?
I miss the brick and mortar record stores, they were such a great way to browse thru music and discover new artists and types of music a list on a computer doesn’t do. I will save my rant on sound quality for another time, but this whole world of “good enough” is rubbish. Plus it creates the trend back songs on albums of music. A lot of the best songs on albums wasn’t the music the record producer or company had planned on being the “hit”. The focus on songs just make music more formalized and your the puppet of the recording industry. Also loss of great artwork and liner notes, musician credits. Last the brick and mortar stores were one of the last social gathering places. Meet friends there, browse a store while killing time waiting for movie or ???, and place where complete strangers would start talking because they noticed similar taste in music. But wait a decade or so and the “new” thing will be record stores. Everything old become new again.
The only plus side for me in this move to download music is as a musician sometime I need to get a single song so I can learn it for a gig. Then its handy to be able to get just the one song. That’s about the only plus I can think of.
What time is it?
Sent from my Motorola Q running Windows Mobile.
Your potential. Our passion.™
I love iTunes gift cards. I have a ton of credit cards, but I still use iTunes gift cards. i love that I can load up my account and then spend it through Appletv
All across the world, recording company executives are having chest pains, dropping their drinks, getting the shakes so bad they can’t light a cigarette.
This was their worst nightmare — iTunes as the Wal*Mart of music. They tried everything they could think of to prevent this from coming to pass, from propping up competing services, to DRM-free music given to everyone but Apple, to lame attempts at playing “hardball”.
Nothing worked. And now their nightmare is coming true. Soon Apple will represent such a big chunk of every record company’s revenue that Jobs will be able to make them dance like puppets. We’ve already seen how Wal*Mart can force studios to change albums or release special versions by threatening not to carry the CD. Now that power passes to iTunes.
Congratulations, record companies. You have nothing to blame but your own incompetance.
——RM
amazon.com does not take cash and you cannot go downtown with cash and buy an amazon music gift card to use at home. You NEED a credit card to buy music from amazon. (Same for Emusic, market place, or other online music distributer)
If a teen has cash then it can be turned into an itunes gift card and then used at home in iTunes.
Better yet take that spare change to the local coinstar, turn it into music.
“All across the world, recording company executives are having chest pains, dropping their drinks, getting the shakes so bad they can’t light a cigarette.”
They have a special name for it also. They call it “Wednesday”.
re: DocBop
“A lot of the best songs on albums wasn’t the music the record producer or company had planned on being the “hit”. The focus on songs just make music more formalized and your the puppet of the recording industry. Also loss of great artwork and liner notes, musician credits. “
I can understand where you are coming from. I used to really enjoy a musty music store called Moby Disc in LA because I could rummage through thousands of CDs and find real treasure.
Although I now do something similar online, I still have a sense of nostalgia.
Regarding the points you made re: song vs album. I think this will only really be an issue for the manufactured “artists” such as Britney Spears. Real artists will still put together groups of songs for distribution, even if the album/CD goes away. Although it is basically an artifact of the music industry, it can still make sense if an artists wants to. However, now there are no limitations on length (I believe there was a cry about loss of sides when CDs first came around).
Re: liner notes/art (some people hammered CDs for this, too). Only a few acts have really taken advantage of this, but digital distribution provides an great opportunity for great artwork, no limit on liner notes, and even video components.
Digital distribution is really an opportunity for artists to lose restrictions and be more creative. Yes, there will be the corporate, manufactured acts that will have slick, commercial drivel. But I am confident that the best artists will take advantage of this in a ways that will significantly add to the art.
I gave my nephews iTunes gift cards for Christmas but ended up exchanging them for cash, their mother couldn’t figure how to use them without a credit card. Did she miss something? I assumed iTunes required a credit card to register for purchases.