Apple: iTunes now the biggest music retailer in US

By Tim Conneally, BetaNews

April 3, 2008, 4:30 PM

Thanks to a spike in post-holiday sales, Apple's iTunes online store outsold long-time top music retailer Wal-Mart in the United States during both January and February, the company said Thursday.

Research firm NPD has been tracking the meteoric rise of iTunes among music retailers since it broke the top ten sellers in the third quarter 2005. It entered the rankings at number seven behind Circuit City, FYE, Amazon.com, Target, Best Buy, and Wal-Mart.

Data from NPD, which tracks retail sales in the US, showed that by the first quarter of 2007, iTunes had upset all but Wal-Mart and Best Buy, establishing a comfortable position in third. The margin between third and second place represents the largest gap in the rankings.

Then, citing NPD data again in February of this year, Apple claimed its iTunes store was number two in music sales in 2007, selling over 200 million songs on Christmas Day alone.

These holiday sales enjoyed a surge in January 2008, when iTunes gift cards were presumably being cashed in. Though Apple presents no gift card redemption figures to substantiate this claim, the holiday gift card spike is a trend well-known among retailers.

It was during one of these spikes that iTunes finally ranked higher than Wal-Mart, garnering a 19% share of music sales over the discount retailer's 15%. According to the company, it was able to hold that top spot during January and February. Apple has sold 4 billion songs through iTunes and counts over 50 million customers.

"The iTunes Store became the largest music retailer in the US based on the amount of music sold during January and February 2008," Apple said in a press release Thursday, stating that the claim was "Based on data from market research firm the NPD Group's MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions."

Also breaking into the top ten with 1% of the market on its side was Real's Rhapsody, which could conceivably grow even larger thanks to recent partnerships with MTV, TiVo, Nokia and Reigncom, as well as with support from Yahoo.

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By orthocross2007

edited Apr 6, 2008 - 3:05 PM

While Apple is the biggest seller of Windows music, it is apparently the WORST provider of the tools necessary to actually use that music.

I speak specifically about the HUGE BUG in iTunes which ALWAYS DISABLES CD/DVD drives on Windows Vista each time iTunes is installed. I see NOTHING about this huge bug in ANY post by ANY Apple fan to an Apple forum or blog (or any Windows blog or forum anywhere.)

NOR do I see a proviso written in the Apple installation instructions for iTunes/Windows on their website.

But,just so unsuspecting consumers will know: Installing iTunes under Vista WILL REMOVE your access to the CD/DVD import/export/burning features of iTunes, as well as REMOVE any access to your Vista CD/DVD drives!!!

There are only TWO ways to fix this:
1) Uninstall Itunes/Quicktime and STOP USING THEM!!!
2) or make a Registry hack to bring back access to the drives. Making this hack will REMOVE iTunes' ability to import, export, or burn your music to or from DVD or CD. After this hack, iTunes will ALWAYS give an error on startup reflecting this change.

NEITHER Microsoft NOR Apple have commented on this huge bug ANYWHERE publically, as far as I know.

Considering that Windows users are the LARGEST users of iTunes, it seems to me that it would be incumbent on Apple to STOP using the GEARAspi drivers, which are the cause of this problem.

PLEASE, Vista users, START TALKING THIS UP all over the WEB!!! Maybe Apple and Microsoft will start LISTENING to us!!! Start posting in EVERY Apple forum you can find, complaining about this breaking of Vista by Apple's iTunes software. COMPLAIN to APPLE about this unfortunate state of affairs which has gone on since Vista was released to manufacturing.

APPLE, STOP USING this driver!!! IT may work very well under your OWN OS, but it DOESN'T under OURS!!!

If you want to play in OUR playground, you MUST play by OUR rules, not YOURS!!!

You want to sell us music, better get this thing FIXED!!!

Donald L McDaniel

Score: 0

By Gary E. Andrews

edited Apr 6, 2008 - 1:25 AM

The trend continues, what appears to be a consumer-driven preferred mode of purchase. The youth market, a multi-billion dollar purse controlled by young people from single digit ages to ages in the 20's and 30's, are 'digital natives,' whereas the older consumer is accustomed to physically handling vinyl discs, eight-track and cassette tapes, and Compact Discs. Digital natives are quite comfortable with downloading single songs, or whole 12-song albums through their computers, and enjoying them on their portable devices. Concomitant with this preference is an aversion to blind purchases which often disappoint the consumer, if I am representative of that disappointed market share. I learned long ago it is risky to purchase a CD at $14-$18 American, only to find the only song I've heard on it is the only one I like. Can you imagine 200 million songs sold on Christmas Day 2007? Out there in the real world were all those consumers with their new digital devices, eager to fill them with music. And in the days to follow all their envious friends began the quest to own their digital devices, and to buy the downloads to fill them up. It's a new world, and the reluctant 'Christopher Columbuses' of the music industry are awakening to the reality of the consumers' demand, and their only option to supply it in the mode the consumer prefers.
The good news for indie (musicians marketing themselves independently of the 'big' record labels and publishers) is that they can market their works to the digital natives, globally, via the internet, and can also produce CD's and sell them, while the big labels' CD sales are crumbling. Long live the digital native. www.garyeandrews.com

Score: 0

By improvelence

posted Apr 4, 2008 - 12:17 PM

I can hear the whining of a thousand Zune owners.

Score: 0

By Michael.Hatamoto

posted Apr 3, 2008 - 7:00 PM

Is this a surprise?

Virtually everyone I know who legally pays for music uses iTunes to, not surprisingly, put music onto an iPod music player.

Score: 0

By foxfyre

posted Apr 3, 2008 - 6:22 PM

Well, it speaks to the dumbing down of fidelity and the desire for mobility over fidelity.

Many of us still prefer higher fidelity hard copies.

And then you have the brain dead kids who think that they are entitled to the efforts of other for free - but don't dare suggest that they work for free! Hey, they may not have brains, but they DO have standards! However low...

But then, that biggest problem is the dearth of new music worth buying at all.

Score: 0

By bousozoku

posted Apr 4, 2008 - 2:25 PM

I can agree with that completely.

Record companies feel entitled to abuse the business, the musicians, and customers, people feel entitled to abuse the record companies and hurt the musicians and those who buy physical media end up not seeing new music unless Hannah Montana and Jonas Brothers are on the lists of anyone who truly cares about music.

The good thing is that 256 Kbps mp3 formatted music isn't so bad. Obviously, it's not as good but it's not terrible.

We'll see if iTunes can maintain a lead over Wal-Mart in the near future. I think Wal-Mart will lose in the long run but not right now. This is just a momentary thing.

Score: 0

By orthocross2007

posted Apr 6, 2008 - 3:12 PM

Personally, I prefer Apple's own format, AAC, over MP3.

Donald L McDanielo

Score: 0

By Hollywood__

posted Apr 3, 2008 - 5:21 PM

I can't beieve people still pay for music.

Score: 0

By imafurby

posted Apr 7, 2008 - 12:30 AM

I can't believe people pay for anything. Why do musicians bother to write songs and go to work recording them? Surely they should just give their work away to people like you, who obviously think that musicians should work for free. Perhaps you'd be so kind as to drop off some cans food for their starving children, if you have enjoyed that free song, or maybe we should just get rid of music altogether, since it's not worth a dime anymore.

Score: 0

By orthocross2007

posted Apr 6, 2008 - 3:09 PM

You can't believe that there are still HONEST men in the world?

Get used to it, friend. We aren't going away anytime soon.

Maybe you should JOIN US!!! "Try it!! You'll like it!!!". You might even wind up WANTING to have a clear conscience for its OWN sake.

Donald L McDaniel

Score: 0

By skimore

posted Apr 3, 2008 - 2:32 PM

Interesting.. I wonder if the bands will be getting any of this money??

Score: 0

By gregmlr

posted Apr 3, 2008 - 2:07 PM

Wow.....1%? Even with all the ads and partnerships Rhapsody has only been able to grab 1%?

Score: 0

By Paul Skinner

posted Apr 3, 2008 - 4:34 PM

I know it sounds very small, but it's still a significant amount of trade. Granted, not really massive for the ads, but still not small.

Score: 0