iTunes Continues Its Climb: 3rd Largest Music Retailer

[MacRumors]

As reported on iLounge, iTunes is now the US's 3rd largest music retailer with 9.8% of music purchases covering the first quarter of 2007. Apple still trails behemoth Walmart (sitting at #1) and Best Buy. The top 5 stands as follows:

1. Walmart (15.8%)
2. Best Buy (13.8%)
3. Apple iTunes (9.8%)
4. Amazon.com (6.7%)
5. Target (6.6%)

Since its inception in early 2003, iTunes quickly became the leading digital music store. In November of 2005, Apple breached the top 10 US music retailers (for both physical and digital sales).

[Much Ado]

Well done Apple, again. Keep this wagon rollin'

[steelfist]

that's good, i hope there's even more choices of music available.

they should have itunes for hong kong, it's annoying me!

[elppa]

Looks like the next "Target" Steve pointed a while back towards has been reached.

[dartzorichalcos]

Can't wait to see when iTunes will be #1.

[mkrishnan]

Impressive!

Does anyone know how this particular ranking works? Is it based on dollar revenue, number of song/album equivalent sales, or number of transactions?

[Yvan256]

Good news, but now start pushing the CRTC so we can have TV shows and movies in Canada too. ;-)

With a lower-cost rental option for both, too. I don't want to rent music just like I don't want to buy most TV shows.

[/dev/toaster]

The #1 spot is a long ways away, I guess it would take closer to 2 or 3 years before iTunes could take that.

However, with the release of the iPhone the #2 spot will be interesting.

[MacTheSpoon]

Congratulations, Apple! I hope that this adds some clout to Apple's efforts to have all labels selling DRM-free music.

[drumforfun19]

haha I just bought something from itunes store last night.

[ajhill]

Those figures are very impressive. And it's great to be #3, but what is the real headline here is While Walmart and Best Buy are 1 and 2, their sales are stagnant, and Apple's are growing at a brisk pace.

This means that iTunes is destine to become the #1 most music seller. It's simple, Apple growing, others stagnant or loosing ground.

Go Apple Go!

[mkrishnan]

As an aside...it's interesting how fragmented the market is. I thought Walmart had a much higher percentage than that -- it's surprising that there's no really strong player anymore in music sales -- no one with a large marketshare.

[BornAgainMac]

When DRM is dropped for everything, it will go even higher.

[ajhill]

The ultimate advantage that Apple has over the other two. An advantage that Walmart and Best Buy can do NOTHING about. You don't have to drive your car anywhere to go and get your music. So a $.99 song doesn't have a "Fuel charge" on it.

Don't laugh, FedEx charges its customers a fuel charge an every package. And Walmart actually had the nerve to blame poor sales last quarter on high fuel costs! If this trend continues, Walmart won't have to figure in the impact of fuel prices on their music sales, because they will be insignificant.

The Music industry should be thanking Steve Jobs for saving their business.

So, too will the cell phone business soon be thanking Steve Jobs.

[twoodcc]

Originally Posted by Much Ado

Well done Apple, again. Keep this wagon rollin'

i agree. great news. keep it goin

[rockthecasbah]

That's amazing! I'm quite surprised that Amazon is only at 6.whatever percent, iTunes = PWN

[shu82]

Go Go Gadget Stock Price!!!!!!!!!!

[BKF]

Interesting here are the different sets of motives that Apple and everyone else bring to selling music. Apple doesn't do it to make money on the sale so much as they do it to make the iPod experience better -- and thus to sell more iPods. So you wonder how that effects the competition between Apple and the other guys.

[p0intblank]

Very nice! It looks like Target dropped a spot... whoops.

[AgingGeek]

Beware the monster we may be creating....

[DTphonehome]

Originally Posted by shu82

Go Go Gadget Stock Price!!!!!!!!!!

This won't directly affect the stock price, as Apple makes very little on music sales. 2/3rd of the money goes to the label. I think they just break even when you factor in the infrastructure/bandwidth costs associated with running the store. It's all about selling iPods. It will help to justify the current high stock price, though, as it bodes well for future iPod/iPhone sales...the more iTunes tracks out there, the less likely someone will be to move to a different player. No question, Apple is locking in lifelong customers.

[ajhill]

Originally Posted by AgingGeek

Beware the monster we may be creating....

Gee,

A convenient, way to buy music online. One that offers new and struggling musicians to sell directly to the fans. And KEEP a higher percentage of the sale for themselves.

Some monster. A price model that just might shift the power in the music industry toward the artist and away from the middleman record company executive who has been overpaid for decades. How many artists do you see that are billionaires? How many record company execs billionaires...I don't think I have enough fingers to count them all. Geffen, Branson, .....

[Porchland]

Originally Posted by DTphonehome

This won't directly affect the stock price, as Apple makes very little on music sales. 2/3rd of the money goes to the label. I think they just break even when you factor in the infrastructure/bandwidth costs associated with running the store. It's all about selling iPods. It will help to justify the current high stock price, though, as it bodes well for future iPod/iPhone sales...the more iTunes tracks out there, the less likely someone will be to move to a different player. No question, Apple is locking in lifelong customers.

The last I saw was that Apple makes a small profit on iTunes downloads. The marginal costs are extremely low, though, so music sales should gradually become more and more profitable over time.

Movie and TV sales have a bit different marginal cost because they eat up so much more bandwidth, but the margins there are probably better than what Apple makes on the music side.

Once tv has a larger installed base, I think you'll see Apple come out with a TV subscription and movie PPV plan that will put more money in Apple's pocket than the current setup.

[nagromme]

Originally Posted by AgingGeek

Beware the monster we may be creating....

Agreed. I think we should boycott user-friendly, easy-to-use services and funnel money into existing monsters Change is scary--best to avoid it!

[lkrupp]

I always have to chuckle when I hear the "I won't buy anything from iTunes until they support Ogg Vorbis, Lossless, 3 megabit encoding", you name the reason, crowd of whiners. iTMS sucks, the iPod sucks. These losers really put a smile on my face, god love 'em.