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Apple Now Number #1 Music Retailer

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Apr 12, 2001
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Arstechnica reports on an internal email from Apple congratulating employees that Apple is now the #1 Music Retailer in the U.S., surpassing Wal-Mart for the first time.
The iTunes Store leads the pack with 19 percent, Wal-Mart (which includes the brick-and-mortar stores as well as its online properties) is second with 15 percent, and Best Buy is third with 13 percent. Amazon is a distant fourth at 6 percent, trailed by the likes of Borders, Circuit City, and Barnes & Noble. Rhapsody is in the tenth slot with 1 percent.
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This comes quickly after a February announcement from Apple that they had surpassed Best Buy to become the #2 music retailer, also based on the NPD MusicWatch Survey.

While there's been some question about the discrepancy of the two data points, it seems possible that the February annoucement was based on December data (Christmas sales are specifically mentioned), while this new data is from January sales.

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Woo Hoo!! Good for Apple.
 
How long?

I know the iPod has been around since Oct 2001 - How long has the iTunes store been around? Either way, they are a newcomer compared to those big box stores.

Good Work!
 
Like I said in the earlier thread: I assume it's post holiday gift cards, but the fact apple can even temporarily be #1 is still pretty impressive.
 
Shadow said:
Excellent. Now if it could only go totally DRM-free...
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Now if only the labels would let apple go completely DRM free. Instead they seem to be happy playing amazon against apple.

There's no reason to let one store to have a drm free version of a song/album and not another, other than politics.
 
Motley said:
Like I said in the earlier thread: I assume it's post holiday gift cards, but the fact apple can even temporarily be #1 is still pretty impressive.
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Since this is not an official press release from Apple, all we can do is speculate at this point.

On a related note, I love this common argument from the record companies.

Article said:
For the music industry, there is a dark side to Apple's ascension to the top of the charts. Buying patterns for digital downloads are different, as customers are far more likely to cherry pick a favorite track or two from an album than purchase the whole thing. In contrast, brick-and-mortar sales are predominantly high-margin CDs. For 2007, that translated into a 10 percent decline in overall music spending according to the NPD Group, and it's a trend that's expected to continue for the foreseeable future.
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Why should customers pay for the songs they don't want? Do these people also expect us to buy bags of apples full of brown, wormy, bruised, dirty apples, or can we go to the bin and select the good ones?
 
Motley said:
Like I said in the earlier thread: I assume it's post holiday gift cards, but the fact apple can even temporarily be #1 is still pretty impressive.
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I agree with you Motley; although this is great news for Apple I think people are jumping the boat a little bit too early here. So far this is only ONE month where Apple has been number one and that was the month after Christmas.

Now if Apple continue this domination for the February and March months then we could say with certainty that they are fixed to the top spot rather than what could only be a temporary position. The important thing is that none of us can say that Apple is now the "Number #1 Music Retailer" rather than being in just a short term spike until we get more data to back it up.

Therefore I think it would've made more sense if the title had been:
"Apple Was Number #1 Music Retailer in January"

Make no mistake I want them to be number one but I don't want to be eating my hat IF the February figures come out and things go back to normal. Whether that long term first place started today or will happen in several months we all know that it WILL happen sooner or later ... :)
 
Sit back and consider how truly amazing this really is... in just a few short years, ONE COMANY has gone from not selling one single song per year, to being the largest music sales company in the world. This is truly amazing, and speaks volumes about what Apple has been able to accomplish with the iPod/iTunes/iTunes Store synergy.

Want to know the really crazy part? Almost all of those songs were sold to people who already spend between $100 and $400 on a extremely high-margin iPod. Many of those customers, in fact, actually own several iPods!

Wal-Mart better hope to hell that Apple doesn't decide to start selling blenders and put Wal-Mart COMPLETELY out of business. :)
 
Motley said:
Now if only the labels would let apple go completely DRM free. Instead they seem to be happy playing amazon against apple.

There's no reason to let one store to have a drm free version of a song/album and not another, other than politics.
Click to expand...

Unfortunately it's just the music industry doing business as usual. They resent how successful the iTunes store has been and want to forget how efficiently Apple brought consumers into the age of legal downloading.
 
It was just a matter of time - on-line sales are increasing and store based CD sales decreasing and, since Apple represent 80% of the on-line market, this had to happen.

However, I do expect to see Amazon and other competitors starting to eat into that share as the market evolves. It'll be interesting to see how much though - I think iTunes' dominance will continue for quite some time yet.

As for the notes about level playing fields for DRM, I've said it before and I'll say it again: record company executives have long memories. ;)
 
I haven't bought anything from iTunes, but I do love to browse the music store to listen to new music.

I've bought 4 albums form amazon though. The 256kbit VBR MP3 files sound way WAY better than the 128 kbit AAC files. And as a not so insignificant bonus, the amazon files are DRM free. Until apple increases the fidelity of the music they sell, I'll be buying CD's and ripping them or buying the files elsewhere.

Sheldon
 
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