NPD: Apple’s iTunes Store unaffected by Amazon’s growing MP3 sales

“Amazon.com’s MP3 service is growing but not at the expense of Apple’s iTunes, according to a report issued Tuesday by market researcher NPD Group,” Greg Sandoval reports for CNET.

“About 10 percent of the people who shopped at AmazonMP3 in February were previous Apple shoppers, NPD said,” Sandoval reports.

“Apple’s iTunes remains the No.1 digital music store. AmazonMP3, which launched last September, slipped past Wal-Mart to take over the No.2 spot in February when comparing the individual music tracks downloaded by consumers in the U.S., according to NPD,” Sandoval reports.

MacDailyNews Note: In terms of all music sales in the U.S. — not just online downloads, but including brick and mortar retail stores as well — NPD currently measures Apple’s total share of the music business at #1, with 19%. Wal-Mart is #2 (15%), Best Buy is #3 (13%), followed by Amazon and Target (6% each), FYE/Coconuts (4%), Borders (3%), Circuit City (3%), and Barnes & Noble (2%). Total physical music sales accounted for 70.9% and paid downloads comprised 29.1% of all the music sold in the U.S. in January. Apple’s iTunes Store currently offers over 6 million songs, has over 50 million customers, and has sold over 4 billion songs. Apple has approximately 80% market share of digital downloads.

“But Amazon has a long way to go, says NPD. Sales at iTunes are more than 10 times larger than Amazon’s, the research firm said,” Sandoval reports.

Full article here.

Katie Marsal reports for AppleInsider, “The research firm’s initial consumer surveys found that 64 percent of the Amazon MP3 unit sales were traced to males compared to 44 percent for iTunes. Amazon MP3 showed the most strength among young adults aged 18 to 25, but only 3 percent of its customers were teens aged 13 to 17.”

“In contrast, the iTunes Music store sold nearly a fifth (18 percent) of its music to teens and also sports a healthy franchise in gift cards among that same demographic, while Amazon has a relatively small base of teen CD buyers,” Marsal reports.

“‘While it’s still very early in the game, there’s no evidence that Apple customers are deserting iTunes for a new alternative, either because of price or DRM restrictions,’ NPD analyst Russ Crupnick said. ‘Amazon may simply be opening new markets from their existing consumer base and introductory promotions,'” Marsal reports.

“NPD says its monthly consumer tracking measures unit sales of a-la-carte downloads from services like iTunes and Amazon MP3, but does not track subscription music downloads or revenue from eMusic and other subscription music services,” Marsal reports.

Full article here.

19 Comments

  1. Until there are no more non-download options for buying music…the market for downloadable music is not saturated. Until that happens there can still be competitors that do not affect each other’s sales.

    Just my $0.02

  2. I’ve been a loyal Apple supporter for many years now (System 7 days) and I’ve started buying my music from amazon. DRM and 256k. I don’t understand why Apple can’t make this happen for iTunes.

  3. I would agree that they have a case (collusion) if the record companies don’t give them the same deal as Amazon when new contracts are negotiated.

    I would assume that they are still working under old contracts.

  4. @ iamdj

    “Cannot apple sue the other record companies for collusion?”

    Even if Apple can sue those goons, i doubt they’ll take that step lightly and without trying other alternative ways first. It’s just not a very good move yet imho. Maybe Apple feel they have more important things to do first. Besides, even if people buy the non-DRM MP3s from Amazon or whoever, they can still play them on their iPods.

  5. Its the big 4, trying to undermine iTunes

    And it’s not working.

    Cannot apple sue the other record companies for collusion?

    I would more expect Apple to play hardball during the next round of negotiations and demand access to the un-DRM’d tracks. The market has made it pretty clear where the power lies. With iTunes accounting for at least 25% of the music companies’ revenues, they can’t afford to walk away.

    ——RM

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