Apple's Itunes climbs to 66% market share

[Adonis the DemiGod!]

NPD: Apple's iTunes Music Store climbs to 66% of digital music market

By Josh Ong
Published: 12:50 AM EST

According to new data from NPD, the iTunes Music Store gained three percent year over year, giving Apple 66 percent of the digital music market, while Amazon's strategy of daily bargains, where it sells albums for a loss, resulted in just a 2 percent gain to 13 percent.

The NPD data, as reported by The Wall Street Journal shows Apple continuing to pull away from Amazon, which tied Walmart for second place for all music sold in the U.S. earlier this year. Apple's share of the digital-download market from from 63.2 percent to 66.2 percent. Amazon's share climbed from 11 percent to 13.3 percent.

Record label distribution executives say the situation could be even worse for Amazon than reported. According to them, Amazon maintains just 6 to 10 percent of the market in any given week, while Apple hovers at closer to 90 percent.

Though Amazon's "daily deals," where it sells albums for as low as $3.99, have seen modest success, the online retail giant reportedly takes a loss on each "deal" sold. People familiar with the matter told the Journal that Amazon often still pays the full wholesale price, usually $7 to $8, for its daily bargains.

Pete Baltaxe, director of Amazon's digital music store, defended the daily deal as "a great way to get people excited about trying Amazon." "If you look across the board, we have been very competitive on price," said Baltaxe.

Amazon has tried the stategy of selling content at a loss before, specifically for the Kindle eReader. Earlier this year, reports emerged that Amazon takes as much as a $4.50 loss on certain e-book titles in order to maintain a dominant position in the market. Apple reportedly argued for higher prices for its iBookstore instead of Amazon's "bargain-basement prices."

NPD's report affirms Apple as the continued leader in music sales. In 2008, Apple surpassed Walmart to take the No. 1 spot among U.S. music retailers. Last year, iTunes represented more than a quarter of all U.S. music sales.

[HolidayGuy]

I thought iTunes' share was 70%+ at one point. Apparently the figures are different, depending on who's talking about them.

Where's the link/URl for this? Did this typo actually appear in the article?
Apple's share of the digital-download market from from

[areyoureadytojump]

^Google is your friend.

www.appleinsider.com/articles/10/12/17/npd_apples_itunes_music_store_climbs_to_66_of_digital_music_market.html

[Adonis the DemiGod!]

Nope Apple was at 63% but now it's at 66% and Amazon is at 13% so between Amazon and Apple that's 79% of the music market.

Here you go guys

[JamaicaFunk²]

I've gotten the majority of my music in 2010 from Amazon. Their prices on new releases plus their daily deals are extremely impressive.

I was just going to buy 2 Bon Jovi songs on iTunes (in that kind of mood today), so I decided to check Amazon mp3 first. The WHOLE greatest hits album is on sale for $3.99. I was going to spend $2.58 on two songs, but I got 16 songs for $3.99.

Amazon doesn't have as wide a selection as iTunes; however, people are fools if they don't check Amazon before buying their digital music.

[Sir Benji]

I agree ^ i rarely buy songs from iTunes anymore and Amazon has some albums that iTunes dosen't even have plus the music is way cheaper, they don't charge you tax, and they have better deals.

[jj99$ - - LeLe]

This is something that is rattling my brain. what exactly is amazon's incentive for selling the majority of their catalog at a loss. yes I know they want to increase make share. but its not like they're doing too well at that. apple have the whole ipod/iphone/ipad to capitalize on it but amazon have nothing.

[MikeCheck12]

^ Maybe because they can? They can make $ off other items AND steal market share from Apple. ? Just a thought ....

[jj99$ - - LeLe]

Dec 18, 2010 12:31:08 GMT -5 MikeCheck12 said:

^ Maybe because they can? They can make $ off other items AND steal market share from Apple. ? Just a thought ....

but the thing is after two years they are still not stealing any market share from apple.

[Minor Scratch]

Apple just has much better accessibility because of the iPhone iTunes app being so convenient. I'm sure Amazon would have similar success if the site was as convenient using mobile technology.

[Lockheart]

Dec 18, 2010 12:25:12 GMT -5 jj99$ - - LeLe said:

This is something that is rattling my brain. what exactly is amazon's incentive for selling the majority of their catalog at a loss. yes I know they want to increase make share. but its not like they're doing too well at that. apple have the whole ipod/iphone/ipad to capitalize on it but amazon have nothing.

Well, if you scoot over to the thread about 1.2 billion illegal downloads in the UK, most are complaining that the $1.29/song is a little too much. I guess that's why Amazon is there. It's only common sense and convenience iPOD users will use iTunes, but those who want lower prices may want to try Amazon. I do agree that they are losing more than gaining although they have increased in share.

[out of reach]

Dec 18, 2010 12:25:12 GMT -5 jj99$ - - LeLe said:

This is something that is rattling my brain. what exactly is amazon's incentive for selling the majority of their catalog at a loss. yes I know they want to increase make share. but its not like they're doing too well at that. apple have the whole ipod/iphone/ipad to capitalize on it but amazon have nothing.

Honestly I don't think they are marketing it very well. I think the average person doesn't realize it's cheaper on amazon or forgets. Apple still has the prestige factor, mobile device connectivity and most importantly ease of use.

I didn't realize it was cheaper until 6 months ago and guess what I still bought some songs on iTunes without checking Amazon first. So I need to make the mental switch but they need to have a serious marketing campaign if they expect to get any movement.

[Adonis the DemiGod!]

I'm not saving enough of Amazon to justify buying downloads from it. Even then I still like Itunes store more because I have an Iphone and an Ipod Shuffle. It's just easier because it's the same platform. I know Amazon will work too but I'll just stick with what works. at the current prices of downloads I'm price agnostic. If I can't afford 1.29 then I can't afford to spend .50 or .99 either.

[Hook]

I will usually buy individual songs on iTunes. The $0.30 difference isn't really worth it to buy at Amazon instead. I'll also buy at iTunes if there's some sort of exclusives tied to an album.

But for full albums, Amazon seems to always have the best price. Even if it isn't a daily deal, their prices are usually still better.

[jj99$ - - LeLe]

Dec 20, 2010 13:06:54 GMT -5 Adonis the DemiGod! said:

I'm not saving enough of Amazon to justify buying downloads from it. Even then I still like Itunes store more because I have an Iphone and an Ipod Shuffle. It's just easier because it's the same platform. I know Amazon will work too but I'll just stick with what works. at the current prices of downloads I'm price agnostic. If I can't afford 1.29 then I can't afford to spend .50 or .99 either.

THIS

[Taylor.]

Amazon MP3 isn't available in Canada yet ( >:( ) so I don't really have any other viable options other than Apple.

[JamaicaFunk²]

Dec 18, 2010 15:01:32 GMT -5 jj99$ - - LeLe said:

Dec 18, 2010 12:31:08 GMT -5 MikeCheck12 said:

^ Maybe because they can? They can make $ off other items AND steal market share from Apple. ? Just a thought ....

but the thing is after two years they are still not stealing any market share from apple.

Well, that's not really true.
Amazon share in digital market rose by 20% from the previous year.
iTunes share rose by 5%. They're probably slowing iTunes' growth of what it could be.

And Adonis, your logic makes no sense. Amazon mp3 downloads directly into iTunes library.
Why is someone going to pay $9.99 for Mariah's new Xmas album on iTunes when it costs $2.99 right now on Amazon??
Saving 30 cents per track might not be a "wow" savings; but, saving $3 - $7 per album is substantial.

[jj99$ - - LeLe]

in Adonis' defense, he doesn't buy albums so its fair enough.
And i also don't like the fact that i cant use amazon when i travel outside the UK

[Pipa]

Dec 20, 2010 17:50:24 GMT -5 Taylor. said:

Amazon MP3 isn't available in Canada yet ( >:( ) so I don't really have any other viable options other than Apple.

There are still so many legal MP3 sites that aren't available in Canada. It practically makes piracy our most convenient option.

[Adonis the DemiGod!]

Dec 20, 2010 18:55:22 GMT -5 JamaicaFunk² said:

Dec 18, 2010 15:01:32 GMT -5 jj99$ - - LeLe said:

but the thing is after two years they are still not stealing any market share from apple.

Well, that's not really true.
Amazon share in digital market rose by 20% from the previous year.
iTunes share rose by 5%. They're probably slowing iTunes' growth of what it could be.

And Adonis, your logic makes no sense. Amazon mp3 downloads directly into iTunes library.
Why is someone going to pay $9.99 for Mariah's new Xmas album on iTunes when it costs $2.99 right now on Amazon??
Saving 30 cents per track might not be a "wow" savings; but, saving $3 - $7 per album is substantial.

The problem is Amazon had to give away downloads of albums at a loss. That isn't going to last forever and when those options cease to exist many people will go back to Itunes to do their shopping. The only thing that happened here is a further concentration of the music market to the two biggest sellers of digital music. Amazon didn't hurt Itunes they just hurt all the other players in the market. Some people are anti iTunes and amazon is simply an alternative. Itunes share went up also. There is no evidence that Amazon took market share at the expense of Itunes as Itunes saw it's market share go up as well. So it would've been at the expense of the smaller players in the digital music marketplace.