updated 09:30 am EDT, Thu April 3, 2008
iTunes Tops Wal-Mart
iTunes for at least a short while has been single largest outlet for music sales in the US, according to new data collected by The NPD Group's MusicWatch Survey conducted in January. The digital store at the time accounted for 19 percent of all music bought in the country versus 15 percent for Wal-Mart's combined in-store and online sales. Best Buy managed 13 percent, while Amazon sat further back at 6 percent despite offering the second-largest digital store in the US. RealNetworks' Rhapsody was the second digital-only store in the market but commands just 1 percent of the US marketplace.
The revealed statistics follow just weeks after NPD had declared iTunes second place in the market, suggesting that the results were a temporary spike in sales rather than a definitive victory. Predictions by NPD had only called for iTunes to overtake its immediate challenger sometime in 2008. On making its estimate, the research group had assumed a cautious approach which would see Apple grow at only half its rate of the time.
News of the at least temporary shift in top rankings puts increasing pressure on physical retailers, many of which have seen CD sales plummet with download sales increasing at a slower overall rate. The MusicWatch study estimates that just 29.1 percent of all purchased music in the US is downloaded and thus isn't yet capable of compensating for a decline in CDs through absolute value.
The results also complicate a larger movement towards removing digital rights management (DRM) from downloads to allow wider fair use of purchases. Although all four major international record labels have offered DRM-free music on Amazon MP3 and other online stores to varying degrees, only EMI from these has so far been willing to do so with iTunes. Rival labels such as Universal and Warner are believed to be deliberately withholding DRM-free songs from iTunes in an attempt to undermine its dominance of the market, but initially appear to be unsuccessful with iTunes momentarily assuming the top spot.