iTunes Maintains Digital Music Dominance Despite Amazon's Discounts

[MacRumors]

The Wall Street Journal takes a look at the digital music download market, demonstrating how Amazon's strategy of deep discounts on certain content has been unable to dent Apple's massive market share held through its iTunes Store. Rather than Amazon taking share from Apple, the two companies appear to be consolidating their leads over smaller competitors.

Amazon's share of the paid digital-download market rose to 13.3% in the third quarter, from 11% the year earlier, according to estimates from research firm NPD Group. Meanwhile, iTunes' share rose to 66.2%, from 63.2%.

Distribution executives at record labels say the disparity between the two may be even steeper, with Amazon commanding just 6% to 10% of the market in any given week, and Apple closer to 90%.

The report points to Amazon's strategy of specific deep discounts, such as offering a new Kid Rock album for only $3.99, as examples of successful promotions run by Amazon to entice customers, but on a day-to-day basis iTunes continues to serve as the place customers turn to for their digital music.

Amazon's deep discounts tend to come in two forms: bargain basement deals such as monthly promotions of $5 albums that generally involve the music industry cutting wholesale prices for Amazon in order to support the pricing, and "Daily Deals" such as the Kid Rock offer in which Amazon pays normal wholesale prices typically in the $7-8 range but charges customers only $3.99, taking a loss in hopes of drawing customers in for additional purchases. Amazon had partnered with certain labels for one-day exclusives on some Daily Deal content, but earlier this year Apple reportedly pressured the labels into reducing their participation in the program and Amazon backtracked on the exclusive offerings. In response, federal investigators launched an antitrust inquiry into the digital music industry, including an examination of Apple's efforts to keep labels from participating in Amazon's program.

Overall, the market for digital download tracks appears to be stagnating, with Billboard seeing only 0.3% growth so far in 2010 with over 1 billion tracks sold. Digital album sales, however, continue to boom, growing 13% this year as sales of physical CD albums have declined 20%.

Article Link: iTunes Maintains Digital Music Dominance Despite Amazon's Discounts

 

[alent1234]

when i can redownload any itunes purchase at any time is when i'll buy music there

 

[Sky Blue]

when i can redownload any itunes purchase at any time is when i'll buy music there

You can, you just need to contact their support.

Wish Amazon sold aac or lossless. I'm not paying for mp3.

 

[Discoverer]

I will start buying music from iTunes when Apple stops embedding my full name and e-mail address into the music files.

 

[Blue Velvet]

Not sure whether it applies to the US, but on-topic of the subject of downloads and iTunes, there's a vaguely interesting piece in the Guardian today about:

Consumers who buy digital music, films and computer software do not have the same legal protection as people buying CDs or DVDs, a consumer watchdog warned today.

Consumer Focus said digital products are not considered "tangible goods", so while consumers on the high street are protected by the Sale of Goods Act if their purchase is not of satisfactory quality, fit for purpose or as described, people buying digital goods online are not protected.

This means that if a downloaded song, movie or piece of software does not play on the buyers' computer or MP3 player, they have no legal right to a refund.

http://www.guardian.co.uk/money/2010/dec/17/warning-digital-music-film-purchases

To me, that's yet another reason for not spending money on iTunes.

 

[earbuddy]

Amazon sells music???

Sorry...maybe I'm out of it. I had no idea Amazon was selling digital music at these prices. They should be doing some advertising to compete with iTunes?

 

[BJB Productions]

Amazon FTW. They generally always beat the prices of iTunes by a few bucks. Plus, it will put your downloads right into iTunes.

...not to mention how incredibly laggy and gross the iTunes store is. It takes FOREVER to load.. and i'm on 4G internet.

 

[NebulaClash]

Hilarious. MacRumors posters continue to complain about iTunes while the rest of the world flocks to it. As usual.

 

[shakeman0]

Sorry...maybe I'm out of it. I had no idea Amazon was selling digital music at these prices. They should be doing some advertising to compete with iTunes?

Same here. I had no idea Amazon offered music discounts.

 

[4look4rd]

I listen to a lot of different music, but I only sporadically repeat a song or artist, so buying music really isn't an option for me. I rather use subscription services (often for the price of one album per month) and buy the music that I absolutely enjoy, than buy one or two albums per month (with a subscription service I normally download 1-2 albums per day).

I will continue to use spotify and zune until iTunes releases its own subscription service.

 

[callmemike20]

Hilarious. MacRumors posters continue to complain about iTunes while the rest of the world flocks to it. As usual.

Are you saying that iTunes has no issues?

Have you ever seen iTunes run on a windows machine? It's extremely slow! In my windows boot camp partition, I started using Zune media player because the speed of itunes was unbearable.

 

[dave420]

Hilarious. MacRumors posters continue to complain about iTunes while the rest of the world flocks to it. As usual.

I've recently started buying music from iTunes (haven't had time to find Limewire replacements) and this article has made me want to take a look at Amazon's offerings though. The main thing I would miss by not using iTunes is being able to easily transfer songs between all our phones, computers, and my iPad.

 

[drumcat]

You can, you just need to contact their support.

Wish Amazon sold aac or lossless. I'm not paying for mp3.

BINGO. This isn't all about which service is cheapest. I switched beck from Amazon when everything went DRM free and 256 aac. If Amazon started selling aac @ 256, I'd choose over price because then it would be, pardon the pun, 2

 

[NebulaClash]

Are you saying that iTunes has no issues

Do you see me saying that? Of course not. Everything has issues, including Amazon's service.

I just think it's funny to see people here always criticizing Apple no matter the story, which the world at large keeps using Apple's stuff happily.

I have no issues with iTunes, but I have the ability to not use Windows. Makes a more pleasant experience in so many ways, as you are noticing with iTunes.

 

[japanime]

Always shop around for the best deal available. Always.

 

[dwd3885]

i only buy music on amazon. much cheaper. that's pretty much the only reason. it's also nice not having to go to itunes and buying from a browser.

 

[nathanw]

I think amazon needs to push advertising for their digital music store a little more. Lots of people don't know it even existis and just stick with apple's music store because it's build into itunes

 

[SBlue1]

damn. i should check amazon more often...

 

[alent1234]

You can, you just need to contact their support.

Wish Amazon sold aac or lossless. I'm not paying for mp3.

i don't have to contact Steam support to download a game anytime on any PC. Shouldn't be a big deal with Apple and this cool high tech cloud/streaming thing. since the prices are the same i'll just buy a CD and put it in the closet after ripping it

 

[jacollins]

The bulk of my purchases have been on Amazon for a while now. The price is usually cheaper for the same thing. However, my single track purchases have dropped substantially after the variable pricing. A lot of good prices on Amazon started matching iTunes, so the only benefits were with album purchases.

Couple other notes. When you download off Amazon, they have an app that automatically puts it into iTunes for you (so you can still keep the music all together). Also, they have several twitter accounts where they post their deals (@amazonmp3 is one I follow).

 

[shartypants]

I think it comes down to convenience (iTunes is built into their iOS devices) and a lot of people just don't know about Amazon. Also, some people probably like to keep their music collection all from one place?

 

[dime21]

I don't like either one. I only buy music on CD. Amazon is good for buying CD's though.

I like the fact that a CD is a physical thing, does not use lossy compression (like MP3 or AAC), and has no DRM whatsoever.

I also like that I can rip that CD into any format I want. Itunes and AAC / Apple Lossless today, and 10 years from now, when some fancy new file format gets invented, I can rip them into that.

When you buy a CD, there's no need to ever buy another copy of that music. It's "future proof".

 

[notjustjay]

I will start buying music from iTunes when Apple stops embedding my full name and e-mail address into the music files.

Why is this a problem? Do you intend to share your files around with complete strangers?

 

[KJ500]

You can, you just need to contact their support.

Wish Amazon sold aac or lossless. I'm not paying for mp3.

To save space, I create mp3 versions of all my songs after I download them on my iphone. If you buy songs via your computer on itunes, it's protected and you can’t make an mp3 without burning a disk or paying for some program. I’m not an audiophile AND CAN NOT TELL THE DIFFERENCE in “sound quality.”

The only music I buy on itunes are songs that Amazone doesn't have.

 

[OllyW]

To save space, I create mp3 versions of all my songs after I download them on my iphone. If you buy songs via your computer on itunes, it's protected and you can’t make an mp3 without burning a disk or paying for some program. I’m not an audiophile AND CAN NOT TELL THE DIFFERENCE in “sound quality.”

The only music I buy on itunes are songs that Amazone doesn't have.

iTunes songs are not protected.