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NPD: iTunes will overtake Wal-Mart in 2008

updated 10:10 am EST, Wed February 27, 2008

iTunes to beat Wal-Mart?

Music sales from the iTunes Store will likely surpass those of budget retailer Wal-Mart by the end of 2008, says the president of NPD Group's Music division. The research firm yesterday released a report indicating that iTunes has already achieved the number-two position in the United States, surpassing even Best Buy and Target. NPD's Russ Crupnick now says, though, Wal-Mart does not pose any serious obstacle in an increasingly digital music market. "Digital sales were up close to 50 percent and CD sales were down 20 percent last year," says Crupnick. "Even at half that growth rate in digital sales, Apple will in all likelihood catch Wal-Mart this year."

Compounding the issue is that as physical sales fall, retailers are either shutting down stores or scaling back their music selection, which creates a self-perpetuating cycle as shoppers are unable to find CDs for the music they want. The iTunes Store also has an inherent advantage over digital sales from the likes of Wal-Mart, Crupnick argues, because teenagers are leading the switch to digital, and many of them do not have credit cards. The ubiquity of iTunes Gift Cards means teens can pay for music using their own cash, a much more convenient proposition.

"That's the question that the music industry has to answer soon," Crupnick adds. "How do we get young people to start paying for music again? They've got to make it easier for teens to buy online. Apple CEO Steve Jobs has done a wonderful job of this. Teens have a way to do commerce with iTunes."




by MacNN Staff

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  1. climacs

    Joined: Dec 1969

    0

    no love for Jobs

    "How do we get young people to start paying for music again? They've got to make it easier for teens to buy online. Apple CEO Steve Jobs has done a wonderful job of this. Teens have a way to do commerce with iTunes."

    And still, no love for Jobs from the music suits and stoopid idjits at USC putting out bogus papers saying that the studios should just put up their own digital download sites and cut Apple out of the equation.

  1. ClevelandAdv

    Joined: Dec 1969

    0

    Studios take note

    Without iTunes and the iPod you would be sunk. Make buying music, easy, affordable and DRM-FREE and people will buy. Make it difficult to buy and use and overcharge and you will lose market share to file-sharing.

  1. testudo

    Joined: Dec 1969

    0

    Re: no love for jobs

    Ummm, do you not realize the labels (and studios) don't like Wal-Mart any more or less than Apple. The control Wal-Mart has drives their profits down.

    This is the same fear as having Apple being the big heavyweight, and why it is suggested they go their own way. You, of course, think they are 'stoopid idjits' for suggesting it, but your opinion is as tainted and biased as the paper authors.

  1. MacScientist

    Joined: Dec 1969

    0

    re: re: no love for jobs

    testudo wrote: Ummm, do you not realize the labels (and studios) don't like Wal-Mart any more or less than Apple. ...

    This is ... why it is suggested they go their own way. You, ..., think they are 'stoopid idjits' for suggesting it, but your opinion is as tainted and biased as the paper authors.


    climacs is to be excused for seeing the obvious. Wal-Mart rose to the top of the retail music food chain by leveraging its tremendous buying power in other retail markets. Apple is rising to the top of the retail music market by making buying music nearly as easy as stealing it online.

    In other words, Apple is selling its customers what they want. It is also providing the music labels a virtually cost-free outlet for their product. Unfortunately for them, they pocket the profits unaccompanied by control.

    They continue to search for an outlet that returns control to them--customer demands be damned. However, every alternative to the iTunes Music Store is a proven failure. Every alternative to the iPod is an also-ran in the digital music player market.

    climacs and other like-minded fans are to be excused for thinking that it is stupid for the music labels to labor so hard to replace the proven success of the iPod/iTunes/iTMS with the proven failure of an alternative. They don't know any better. When you have higher knowledge, you must endeavor to be magnanimous.

  1. simdude

    Joined: Dec 1969

    0

    credit cards?

    The iTunes Store also has an inherent advantage over digital sales from the likes of Wal-Mart, Crupnick argues, because teenagers are leading the switch to digital, and many of them do not have credit cards.

    Umm, last time I checked you could buy CD's with cash. Did Wal-Mart stop accepting cash?

  1. climacs

    Joined: Dec 1969

    0

    @macscientist

    heh, indeedily-doodily.

    BTW, being slagged off by testudo, I wear that as a badge of honor.

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