The popularity of the iPod and eMusic’s unprotected MP3 files have helped the company quietly move into second place behind iTunes in digital music sales. Even though eMusic lacks hits from the four major labels and only offers independent music, the company is beating rivals thanks to its ability to sell DRM-free, iPod-compatible songs. “There’s no question the iPod success has worked in our favor,” said eMusic CEO David Pakman. “The consumer confusion over interoperable formats gives us a great advantage.” Napster, Real Rhapsody, and Yahoo Music have floundered in part because of the iPod-incompatible copy-protection technology used on their songs. According to data from the NPD Group, iTunes leads the market with 67%, followed by eMusic with 11%, Real Rhapsody with 4%, Napster with 4% and MSN Music 3%.
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