NPD: Amazon has about one tenth the market share of Apple’s iTunes Store

“If you pan back and look at how people are getting their music these days you see that the companies fighting for the people who pay for music are battling over an ever-smaller piece of the pie,” Saul Hansell blogs for The New York Times.

“NPD’s annual survey of Internet users, which is some 80 percent of the population these days, found that 10 percent of the music they acquired last year came from paid downloads. That is a big increase from 7 percent in 2006. But since the number of physical CDs they bought plummeted, the overall share of music they paid for fell to 42 percent from 48 percent,” Hansell reports.

“NPD’s data about how well Amazon.com’s five month old digital music store is doing made me wonder about the bigger picture of how Amazon and Apple fit into that overall music market,” Hansell reports. “The music industry has high hopes for Amazon. All four major labels are allowing it to sell their songs as MP3 files, without any protection against illegal copying. Their goal is to win over some people who may have been stealing music and also to create a counterbalance against Apple, which some in the music industry believe has too much power.”

“The NPD data for February show that so far Amazon has had a strong start, although it is still tiny. It now has one tenth the market share of Apple. Since Apple has largely dominated the per-track download sales, that makes Amazon the distant No.2 in the market, said Russ Crupnick, who runs NPD’s music service,” Hansell reports.

More in the full article, including a slide that puts into perspective how people are listening to music these days, here.

41 Comments

  1. It would be a competition if iTunes was able to sell all of its tracks DRM-free.

    As is, it’s not a competition. It’s the labels propping up a front with underhanded tactics. And they’re still losing.

  2. @bon,
    Me too. The record labels act like a bunch of spoiled bratty kids who are pissed off that they didn’t come up with the idea first. Now that iTunes is popular they are kicking themselves and throwing hissy fits.

  3. Odd – 10 percent of the market in 5 months is pretty good to me. Apple have less in the phone or PC market.

    Apple may start losing a lot of market share because they are not allowed to sell DRM-free material from all labels and are charged more.

    Then the gov’t or lawyers should step in and stop the collusion to reduce Apple’s performance.

  4. As long as Amazon doesn’t suddenly overtake iTunes, this situation is a good thing. The labels think they’re undermining Apple’s dominance in the digital medium market but they are also undermining their own ability to force DRM down our throats!

    Apple sells iPods either way.

  5. There are still 2 very important points here –

    1. Amazon music plays on iPods
    2. Amazon does not make their own player

    So it really doesn’t matter how much music they sell. Chances are, most of it will end up on iPods anyway. Win win.

  6. I wouldn’t be surprised to find out that Amazon’s DRM free MP3’s are actually *contributing* to pirate-like behaviour in teens.

    If you use iTunes, the songs go right into iTunes and you have to know how to get them out and spend the time to do it. You can buy Amazon MP3’s and they just download onto your desktop. I know *technically* DRM is DRM, but the iTunes eco-system is set up to promote purchasing and de-emphasize the possibilities of stealing.

    Just another case of the music and media industries shooting themselves in the feet IMO. Swallow your pride and ask Apple to carry your music again and everyone will be happy.

  7. They scream and scream about piracy. They demand and demand DRM, saying this is the only way to protect their product. They howl that Apple’s 99-cents per song is just not enough. Yet they throw all of that aside to undermine Apple, the company that showed them the way out of the wilderness. The people running record companies are ungrateful, duplicitous and deceitful pricks. Amazon shares no blame in this, and they are doing what they should do. I wish someone would nail them for the collusion to damage Apple that they are perpetrating. If the record companies were able to succeed in knocking Apple out of its position of influence, you can bet that Amazon’s non-DRM, 89-cent downloads would disappear in short order.

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