iTunes Share of U.S. Music Sales Reaches 25%

[MacRumors]

Market research firm NPD today reports that Apple's iTunes was the number one music retailer in the U.S. for the first half of 2009 with 25% of unit sales. Apple's share of the total market is up from 21% in 2008 and 14% in 2007.

According to NPD MusicWatch, when it comes to the unit-sales volume of music sold at retail – including paid digital music downloads and CDs – Apple iTunes leads in the U.S. with 25 percent of music units sold, which is up from 21 percent in 2008 and 14 percent in 2007. Walmart (including Walmart, Walmart.com, Walmart Music Downloads) remains in second position with 14 percent of music volume sold at their stores and Web sites with Best Buy ranked third.

The move comes as the music industry continues to see a shift from CDs to digital downloads, with digital downloads now accounting for 35% of total sales, up from 30% in 2008 and 20% in 2007. As the trend continue, NPD sees digital download sales equalling CD sales by the end of 2010.

Within the digital download segment, iTunes easily claimed the top spot with 69% of the segment for the first half of 2009, followed by Amazon at 8%. iTunes has led the digital download segment essentially since its inception in 2003.

Apple announced to its employees in April 2008 that it had recently become the #1 overall music retailer in the U.S., and Apple's lead over #2 Walmart has continued to increase since that time.

Article Link: iTunes Share of U.S. Music Sales Reaches 25%

 

[mkrishnan]

Perhaps it hasn't quite reached its saturation point yet... impressive. I think a potential downside is that there's no evidence that the three-tier pricing system (which I hate) is stifling sales....

 

[jav6454]

Thus, main reason why many music labels dare not piss Apple off. According to an old news coverage, they don't because of fear of being de-listed from iTunes and see music sales plummet.

 

[SydneyDev]

That is such amazing growth, truly extraordinary.

 

[likemyorbs]

I wonder what Limewire's share in the music industry is...

 

[Chupa Chupa]

Perhaps it hasn't quite reached its saturation point yet... impressive. I think a potential downside is that there's no evidence that the three-tier pricing system (which I hate) is stifling sales....

The 3 tier system was not just a raw price hike. It brought some good things for the consumer like higher bitrate music and the end of PITA style DRM. I still don't buy a lot of digital music though b/c CDs are nearly the same price as a digital album and it come with lossless files and an instant backup.

I'd be willing to pay more than current iTunes prices if Apple offered lossless music and the right to re-download purchased music. I really don't like storing CDs, plus they are kind of a waste at this point since I rip them one and then store them.

 

[DougB541]

I wonder what Limewire's share in the music industry is...

Congrats...you have won the thread hahah.

With the amount of iPods out there (and the amount of ignorant consumers who probably now realize that their music they have been buying over the years will only work on an iPod) this is to be expected.

Kudos for apple for jumping on the digital music front as strongly as they did.

 

[Lesser Evets]

Very impressive. Jobs.... you've done it again.

I wonder where it will top out. Could be over 50% in another 5 or 10 years, as long as the iPod platform and iTunes platform remain in top form. They really have to clean up some of the function a little, though, and get über anal with the iTunes program.

 

[mkrishnan]

The 3 tier system was not just a raw price hike. It brought some good things for the consumer like higher bitrate music and the end of PITA style DRM. I still don't buy a lot of digital music though b/c CDs are nearly the same price as a digital album and it come with lossless files and an instant backup.

I'd be willing to pay more than current iTunes prices if Apple offered lossless music and the right to re-download purchased music. I really don't like storing CDs, plus they are kind of a waste at this point since I rip them one and then store them.

That argument that the improvements were lynch-pinned to the three-tier pricing is a hard one for me to buy fully -- that's more or less what happened with Apple, but Amazon offered 256kbps (albeit MP3) and DRM-free music well before it started offering three-tier pricing. But I do agree with your other points. Re-download particularly (well, I could see it being an expensive offering if Apple gave you lossless files with re-download, but at 256k it's pretty trivial) is something they should have had since inception.

 

[ghostface147]

Ehh.....nothing to see here. Apple continuing it's dominance.

 

[shiseiryu1]

Good News

I'm glad to see that iTunes is dominating. Overall it's a great service...plenty of variety and great ease-of-use.

One bad thing that I've noticed about iTunes recently though is if you buy an App from the App Store and then it is later revoked/removed, you do not automatically receive your money back. I think this is a serious flaw and if Apple is going remove Apps they need to auto-refund customers as well. If they don't fix this, it will erode consumer confidence in the App Store. I've had several apps removed from my phone now that I've had to email apple support about to get my refund. That's just unacceptable and there is no excuse for it.

 

[Chupa Chupa]

That is such amazing growth, truly extraordinary.

It's really not all that extraordinary. The demand for music downloads was huge back in the Napster 1.0 days. The music industry fought it and it took Steve Jobs marketing genius to do what the labels could not. Anyone who used Napster 1.0 knows what a frustrating timewaster it could be at times. $.99 legal downloads were a bargain in comparison. The extraordinary part is that the fools in the music industry that resisted legal digital downloads still have jobs.

 

[shiseiryu1]

Good Point

I'd be willing to pay more than current iTunes prices if Apple offered lossless music and the right to re-download purchased music. I really don't like storing CDs, plus they are kind of a waste at this point since I rip them one and then store them.

I think we (as iTunes customers) are already paying enough for our content. Just like how Apple lets you re-download Apps from the App store they need to do this with music as well. If Apple is going to position itself as offering a superior service to its customers, free re-downloads needs to be a part of it.

The good thing about offering free re-downloads is that if Apple implements (and advertises) this it will be very hard for the competition to match because Apple already has a huge infrastructure for offering the downloads. Therefore for a competitor to swoop in and try to offer the same service (but at a cheaper price) it will be very difficult and costly.

 

[dwman]

One bad thing that I've noticed about iTunes recently though is if you buy an App from the App Store and then it is later revoked/removed, you do not automatically receive your money back. I think this is a serious flaw and if Apple is going remove Apps they need to auto-refund customers as well. If they don't fix this, it will erode consumer confidence in the App Store. I've had several apps removed from my phone now that I've had to email apple support about to get my refund. That's just unacceptable and there is no excuse for it.

Good point, and while I agree with you, I'm guessing it's because since you already purchased the app, a refund would essentially be "giving" it to you for free, even if it can no longer have updates since it was pulled. (plus they lose out on their 30% take) I think since they feel you willingly purchased the app, it's yours, regardless of what happens to it in the future. That being said, I still hate the fact that there's no trial period on apps.

 

[*LTD*]

The most convenient, fun, and satisfying way to get music. Still.

 

[iTootyFrooty]

If only, If only

If they would just unlock the files bought so it is enabled to be used on other devices, iTunes would be MASSIVE. But then again that might bring the iPod sales down. The question that should be asked (and that apple have already thought about) is probably would the increase of iTunes sales outweight the loss in iPod sales after people wont need to buy ipods to put the itunes music on it.

 

[nkawtg72]

this news is unacceptable!!!!! more proof of the monopoly that apple holds on the world!!!! the government must step in a do something about this!!!!

(snicker snicker)

 

[Sky Blue]

If they would just unlock the files bought so it is enabled to be used on other devices.

errr.. they have

 

[Small White Car]

I've had several apps removed from my phone now that I've had to email apple support about to get my refund. That's just unacceptable and there is no excuse for it.

What apps were those? I was not aware that they'd done that with any apps up to this point.

I have one or two apps that have been removed from the store, but I still have the app on my phone and my computer.

Apple does have the ability to do what you've described, but I just hadn't heard about that happening yet.

 

[nkawtg72]

If they would just unlock the files bought so it is enabled to be used on other devices, iTunes would be MASSIVE. But then again that might bring the iPod sales down. The question that should be asked (and that apple have already thought about) is probably would the increase of iTunes sales outweight the loss in iPod sales after people wont need to buy ipods to put the itunes music on it.

DRM is gone. if you refer to the use of mp4, apple doesn't and cant restrict another manufacturer from supporting that codec.

 

[BongoBanger]

No surprise here - it's incredibly difficult to shift an entrenched market leader.

Kudos to Apple for spotting the opportunity and taking it. Can't see anyone threatening their dominance for a long, long time.

 

[hayesk]

I'm glad to see that iTunes is dominating. Overall it's a great service...plenty of variety and great ease-of-use.

One bad thing that I've noticed about iTunes recently though is if you buy an App from the App Store and then it is later revoked/removed, you do not automatically receive your money back. I think this is a serious flaw and if Apple is going remove Apps they need to auto-refund customers as well. If they don't fix this, it will erode consumer confidence in the App Store. I've had several apps removed from my phone now that I've had to email apple support about to get my refund. That's just unacceptable and there is no excuse for it.

You don't receive your money back, but they don't remove the app from your device either. This is not a flaw and that's the way it should be. You paid for it, you got it. Transaction complete.

If I went out and bought Adobe GoLive last year, do you think Adobe will give me my money back when they stopped selling it this year? Not a chance.

 

[mobi]

That is such amazing growth, truly extraordinary.

Indeed! When you take a step back and look the launch of the original iPod and the evolution of how the iPod + iTunes took off...amazing stuff!

 

[Small White Car]

errr.. they have

Perhaps he's a time traveler from 2007.

You never know!

 

[hayesk]

If they would just unlock the files bought so it is enabled to be used on other devices, iTunes would be MASSIVE. But then again that might bring the iPod sales down.

Uhm... they did that long ago. The songs you buy on iTunes are in no way locked to the iPod. You can put the songs on any player that supports AAC playback.