iTunes Store Now #1 Music Retailer In US
The music label's greatest nightmare has occurred: the iTunes Store has surpassed Wal*Mart to become the largest music retailer in the United States (both brick and mortar and online.)
An e-mail sent out to Apple employees, along with a copy of the NPD data for January 2008 shows Apple at the top with 19% market share, Wal*Mart second with 15% and Best Buy third with 13%.
This is big news not just for Apple, but the music industry in general. The fact that an online only, a la carte music retailer like the iTunes Store has reached #1 in the music retail sales charts clearly indicates that the way in which consumers purchase music has fundamentally changed, and it's this change that the music labels fear.
This means their album based sales approach is officially dead, and the labels are still struggling with the concept that horrible songs won't be bought alongside good songs anymore.
This isn't the end of the nightmare for music labels; however, as a retail landscape dominated by Apple has recently become a thorn in the side of music labels: Steve Jobs's unrelenting demands on the music labels for consistent music pricing (not allowing the labels to price new albums and songs higher than catalogue titles) become more and more powerful as the iTunes Store gains more market share.
The music labels have tried recently to wrest control from Apple by offering their catalogues DRM-free on other stores such as Amazon, but so far their efforts have not dented the iTunes juggernaut.
Will the music labels react to this new announcement? I've got my popcorn ready.
Apple passes Wal-Mart, now #1 music retailer in US [Ars Technica]
Den Den Boy
Posted to Hot Stuff, In Your Pocket, In the News, On Your Desk on 3 April 2008
· Comments (1)
Other stuff like this: Apple, iTunes, iTunes Store, music, NPD, NPD Group
If it ain't broke... cease production. Right?
"This means their album based sales approach is officially dead, and the labels are still struggling with the concept that horrible songs won't be bought alongside good songs anymore."
This isn't necessarily true, since iTunes offers the ability to purchase songs as an entire album or as individual songs. To make this claim, you'd need to see data from Apple that breaks down the purchasing behavior of its customers. All this data does is simply show that iTunes is the top retailer, which could be for a variety of reasons (instant gratification/impulse buying, easy-to-use interface, popularity of the iPod, etc.).