Apple Now America's Number Two Music Retailer

Dennis Faas's picture

Apple has become the second largest seller of music in America, behind only Wal-Mart. The statistic comes from market research group NPD; its chart is based on the number of sales rather than the actual revenue. To make for a fair comparison, it counts 12 individual song downloads on Apple's iTunes service as equivalent to one sale of a physical CD album.

Apple was ranked fourth in the same study last year, but has now leapfrogged both Target and Best Buy. A spokesman for NPD said the change was "fairly understandable given the pressure that's been on CDs and the almost 50-percent growth in digital downloading in the past year."

Legal downloads now make up about 10% of music sales in the US, and the number of people who downloaded at least one legal track last year rose from 24 million to 29 million. That increase appears to be driven largely by 36-50 year olds becoming more comfortable with online music buying. And while more people are using legal download sites, the numbers using peer-to-peer technology (such as torrent sites) for music held steady. (Source:

Meanwhile, CDs seem to be struggling to reach new audiences. 48% of teenagers did not buy a single compact disc last year, up from 38% in 2006.

Claims that downloading hurts the music industry appear questionable at best. The total amount of music legally bought last year rose by six per cent. Total spending was down by 10% though, mainly because people are switching from expensive CDs to cheaper downloads. It's not clear what effect the trend is having on net revenues once you take into account the varying costs of producing CDs and running online stores. (Source:

As more and more young, first-time music buyers come to see services like iTunes as the 'normal' way to buy music, it seems the switch from CD to download will only continue. However, it's less certain that Apple will continue to be the main beneficiary given that Amazon -- who weren't cited in these statistics -- are becoming a player in the download market.

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