Apple iTunes Store solidifies lead in U.S. music accounts as mobile merchants fade

Apple Store“Apple’s iTunes store, which emerged in 2008 as the top U.S. music account for the first time, widened its lead last year over former market leader Walmart,” Ed Christman reports for Billboard.

“According to my analysis of 2009 sales and market share, the top 20 U.S. music accounts accounted for 85% of the total account base. That’s down from 88% in 2008 and runs counter to an almost decade-long consolidation trend under which the top 20 accounts continued to capture an ever larger share of the total market,” Christman reports. “That was due to declining market share among the brick-and-mortar accounts in the top 20. The top 20 merchants selling CDs and other physical formats comprised 49.3% of the account base in 2009, plunging from 57.5% in 2008.”

“Meanwhile, digital accounts in the top 20 made up a combined 35.5% of the total account base, up from 31.6% in 2008,” Christman reports. “That gain of nearly four percentage points came despite a decline in the combined share of mobile service providers, once touted as the recording industry’s next big thing. Collectively, Verizon Wireless, Sprint Nextel, T-Mobile, AT&T and mobile content provider Zed accounted for 4.9% of the market, down from 6.6% in 2008. That was probably due to the declining number of ringtone downloads, as well as declining ringtone prices.”

Christman reports, “But iTunes more than offset the mobile decline, growing its share of the U.S. account base to 26.7%, up from 21.4% in 2008 and more than double the 12.7% share the company had in 2007… Amazon’s MP3 store captured a 1.3% share in 2009, up from 0.8% in the prior year and good enough to have ranked as the 10th-largest account. But that’s still well short of where major labels had hoped Amazon’s download store would be by now, dimming earlier expectations that it will be able to significantly reduce the labels’ heavy dependence on iTunes for digital sales.

Full article here.

[Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]


  1. It’s not surprising to see Walmart decline. The physical space they have dedicated to music has shrunk and they have very little selection of music at all anymore (if they ever did). Unless you’re looking for something in the top-20 or a greatest hits compilation from a well-known artist, you’re better off looking elsewhere.

    This to me is where something like the iTunes Store really shines, as it can theoretically have an unlimited catalog of music to choose from.

  2. People still buy Cd’s?

    I imported all my into iTunes years ago.

    Then decided that all the jewel cases took up too much room so I threw those away and stored the Cd’s on a spindle.

    Then after having them stored that way for a year or two I decided that I’d never use them again and put over 100 Cd’s up for sale on eBay in one big auction. Started the auction at $29. Figured I’d let the market decide. They decided alright. Auction ended after 7 days without a single bid. 100 Classic rock CD’s for $29? And not a single bid? I donated them to Goodwill. Who knows what they were able to do with them – with no jewel cases.

  3. I don’t really care about the iTunes Music Store anymore. Since the big boys let Amazon strip the DRM for their MP3 store, and later allowed Apple to do so as well, it simply doesn’t matter where you get your music. Amazon, Apple, Zune (that still has a store right?), it’ll all play on any cell phone or PMP on the market. This was Steve Job’s ultimate dream for Music back in 1999 when he announced iTunes. All market forces at the time were pushing for a complete MS DRM lock on music, that would have locked Apple, Linux, and everyone else out of the market. But now, you can buy music from any store and play it on any computer or device. It’s a good thing.

    What is interesting today is the direction Movies and TV shows will go. Apple has set out a war on Flash, the webs current proprietary standard, and understandably doesn’t want to have to beg the likes of Adobe for continuing support for the Mac. The next best option available is MS’s Silverlight, which is not any better. Apply tried to up end the system, with a pay-to-own model like they did with music, but that has been rejected by the market. People consume movies and TV shows differently than they do music. With a few exceptions, you only watch a tv show or movie once. It just takes up too much space on a hard drive to store indefinately -which you will want to because you spent the extra money to buy it. Then they went to a Rental model, but that failed too, again because of price. I’m just not going to pay $4 to watch a movie once, when Netflix will let me stream dozens of movies for $10/month and Hulu will let me watch a practically infinite number of TV shows for free.

    But, unfortunately for Apple, both of those company’s business models rely on Flash and Silverlight. Sure, the companies can make Apps that will work on the iPad, but that still leaves Apple having to beg them for continued development. If MS, Google, or Adobe buys them up, Apple could find themselves having to beg these companies once again.

  4. @Switcheroo

    Wow. I will never part with my classical music CD’s. Classical music just sounds different in compressed format.

    Looking forward to a future when I can play them in my own house at full blast and not through earphones.

  5. I hate to say it, but the music labels got their way with me. I now buy a lot of music on Amazon, because most of their music, including currently popular songs, are still 99 cents versus $1.29 in iTunes. I wish I could buy my music exclusively from iTunes, but I prefer the cheaper price. And my hearing isn’t the greatest anymore thanks to two surgeries, so I can’t really tell the difference between 128Kbps MP3 and 256Kbps AAC anymore.

  6. @Wow

    You are 100% right. I really wish iTunes would sell classical and instrumental stuff (I buy a lot of new age piano music) in a Lossless format.

  7. @Wow
    “Wow. I will never part with my classical music CD’s. Classical music just sounds different in compressed format.”

    I agree. I’m not getting rid of my Classical CD’s.
    Not only do they sound better, they’re also more likely to have linear notes and extra info.

  8. CDs still have a place.

    You can buy used CDs for cheap, either in a local store or online. You get the quality of the CD, for a price less than iTunes or Amazon. You get the liner material, whatever that is. After you rip them, it’s up to you what you then do with them.

    Further, the scum sucking labels already got their cut, so you’re not supporting them.

  9. I didn’t realize Amazon’s MP3 Store was only 1.3%. Then again, most of the downloads I make through Amazon are free items. Most of the downloads I make through iTunes costs me 99-cents each. “Free” probably does not count in the market share numbers.

    I think Amazon has too many free downloads at any given time. On iTunes, the free items are special and get attention, leading to actual purchases. On Amazon, there are hundreds of free items; customers end up spending all their time hunting for free stuff, instead of shopping and buying. It’s not bad for the customer, but it’s a poor way to run a for-profit “business.”

  10. I wonder what Apple’s revenue is for the iTunes music? They must be clocking 4BB downloads annually by now. If the average price per song is ~70 cents then they could realize up to $3BB per year. Of course 2/3rds of that will go straight to the labels.

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