Friday, April 11, 2008

Apple's iTunes is the largest music retailer in the US

Apple had just confirmed that they had surpassed Walmart as the largest music retailer in the US. Last month Apple passed Best Buy to become the number two retailer in the the US in December. Now, Apple has ascended to the top of the charts, surpassing Wal-Mart for the first time ever.

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.

The fact that a digital-only retailer has ascended to the top of the sales charts is not unexpected, but it does demonstrate just how much the music landscape has changed since the beginning of the decade. There is a sharp increase in digital music downloads as physical CD sales are drying up fast. Overall, paid downloads accounted for almost 30 percent of all music sold in January, a number that would have been unthinkable just a few short years ago.

The buying patterns had changed drastically with digital downloads as customers are cherry picking what they like instead of buying the whole album and this is certainly not going to sound musical to the record labels who had been enjoying fat margin selling album in CD format. 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. The future certainly looks very good for digital music distribution and watch out for direct delivery over the air to mobile phones.

1 comment:

Billy said...

When Apple started their mobile business till then their business is improving and now we can see the result.