According to the latest data about the digital music sales released
by the market research company, NPD Group, (the same company that tracks gaming
sales), Apple’s iTunes is the second largest music retailer in the U.S., based
on the amount of music sold during 2007.
The NPD Group's MusicWatch survey captures consumer reported
past week unit purchases and counts one CD representing 12 tracks, excluding
wireless transactions. Wal-Mart Stores gained the first place, while BestBuy took
the third place and Target the fourth.
The data released by the company are based on NPD’s Digital
Music Study, which is s an annual survey of US
consumer’s demand, and NPD MusicWatch, that racks past seven-day music purchase
habits of the US
population age 13 and older.
According to the data released by the NPD Group has started
its MusicWatch survey in the middle of 2006, and in the last quarter of that
year, BestBuy ranked second and Target third, with Apple in a fourth spot.
However, it seems like the introduction of iPhone and new lineup
of iPods, along with EMI’s catalog of DRM free tracks have boosted the music sales
on iTunes.
In addition, in early 2007, Apple’s iTunes introduced a new
feature called “Complete MyAlbum” thanks to which the music fans who purchased
singles for $.99 a piece are able to get the full album they belong to at a
discounted price.
The NPD Group also noted that there are 29 million users, or
10 percent of all people who are buying music in the U.S., that used the download music services
during 2007. In 2006 only 24 million users turned to online music stores to buy
their music.
Though, in a bad news for the music studios, the NPD Group revealed
that the actual spending rates across the industry declined by 10 percent due
to lackluster CD sales, dropping from about $44 per capita to $40 among
Internet users.
However, the NPD Group said the percent of the Internet
population in the U.S.
who engaged in peer-to-peer (P2P) file sharing reached a plateau of 19 percent
last year, but the number of files each user downloaded increased, and P2P
music sharing continued to grow aggressively among teens.
Last month, the market researcher Nielsen SoundScan revealed
the recording industry had a weak year in 2007, because album sales dropped
15%. Album sales in the form of CDs, cassettes, LPs and other formats sold
500.5 million units, a downfall from 2006, when it registered a fall of only
4.9%.The album sales dropped with 9.5 % from 2006. The figures show how the
recording industry failed to undermine music piracy.
On the other hand, Nielsen SoundScan revealed the sales in
digital albums rose 45 % to 844.2 million from the 588.2 million in 2006.
Today, in a press statement, Apple announced it has reached
the four billion sold songs milestone and it has 50 million customers
worldwide. iTunes Music Store opened in April 2003 and the one-billionth song
was purchased in February 2006.
Also in April 2007 Apple announced that the 100 millionth
iPod has been sold, making the iPod the fastest selling music player in
history.
However, Apple’s iTunes, Wal-Mart and the other companies are
facing a strong competition from Amazon MP3 store unveiled last year in
September.
In just few months, Amazon MP3 nailed down distribution
deals with all four major music companies, Sony BMG, Universal Music, Warner
Group and EMI, to sell DRM free-tracks.
In addition, Amazon MP3 is selling the songs at 89 cents,
making the offer even more interesting for potential buyers, because iTunes
sells tracks for 10 cents more.
Also, in August last years, Wal-Mart has begun selling
DRM-free tracks in an attempt to make its music download service more
attractive to customers. Wal-Mart is currently selling songs in both
unprotected MP3 format and DRM-laden WMA format, the difference between the two
being registered at the quality of sound and at the price level.
