News
iTunes holds 66% share of music download market in Q3
By Charles Starrett
Contributing Editor
Published: Friday, December 17, 2010
News Categories: iTunes
iTunes accounted for 66.2 percent of the paid digital music download market in the third quarter, up from 63.2 in the year-ago quarter, according to the latest data from NPD. Citing the data, the Wall Street Journal reports that Amazon’s share of the market rose to 13.3 percent over the same period, up from 11 percent the year earlier; however, record label executives note that the disparity between the two may be even larger, with with Amazon holding only 6-10 percent of the market in any given week, with Apple closer to 90 percent. The report suggests that Amazon’s “daily deal” albums may be responsible, and, citing people familiar with the matter, claims that Amazon normally pays full wholesale price for those albums — normally $7 to $8 — and eats the difference between the wholesale and $3.99 discounted price. Notably, the report also claims that digital album downloads have risen 13 percent this year, compared to a 0.3 percent gain for individual song downloads, and a 20 percent drop in CD sales.
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1
Three factors immediately come to mind the report doesn’t bother to address:
First, iTunes store has a perceived advantage of convenience. You’re in there sticking a playlist on your iPod and, “hey, let’s see what’s new in the iTunes store…”. For a nation suffering from collective ADHD, that’s going to edge out Amazon that requires a browser and the downloader helper program.
Second, iTunes offers pre-orders on digital sales, Amazon doesn’t. Again, the convenience thing rears its head. If you want the newest album as soon as possible, iTunes will have it ready to stick on your iPod when you get up that morning if your pre-order. Amazon may have a $3.99 first day sale, but you do actually have use your brain and remember launch day for the album.
Third, Amazon is competing with themselves with their CD sales. It is not at all unusual to find physical CDs cheaper than their digital equivalents, nor is there the equivalent of the $0.01 + $1.98 shipping deals you regularly find in the Amazon marketplace for used CDs when it comes to digital downloads. For pre-orders, it’s a similar divide: you can’t pre-order digitally at all, and, at least with my Prime membership, I’m guaranteed launch day arrival for new CDs at no extra charge and I’m guaranteed the lowest price the physical CD sells for at any point from when I order it up to launch day, and that’s always cheaper than going with iTunes in the U.S..
iTunes does have its uses, though, when I saw they had put the new Decemberists album up for pre-sale, I hopped over to Amazon and pre-ordered the CD there
It is, undoubtedly, a much better presented music “store” than Amazon’s.
Posted by Code Monkey in Midstate New York on December 17, 2010 at 12:17 PM (PST)
2
@#1,
It’s the same for apps like Kindle for iPhone/iPad. I simply deleted them after I realized I had to jump between the app and my web browser on the iPad. Not so much ADHD as “really, this seems so three years ago”
Apple has the platform controlled, and thus, it’s apps are more efficient. I don’t know if other vendors can technically do the same, but for me, I’m not going to bother when I have the iTunes store and iBook stores to have a hassle-free experience.
Like you, I prefer CDs. But on occasion, I pickup songs on a whim, and I don’t want to jockey between two apps to get them.
Posted by Sb on December 18, 2010 at 10:06 AM (PST)