iTunes Dominance Of Digital Music Growing
Apple's iTunes dominance of digital music sales continues to grow according to a new NPD Group study. The market leaders share of online music sales rose to 66.2%, from 63.2% in the the third quarter of the year while Amazon's share rose to 13.3% from 11% a year earlier. But record labels say the real numbers may be much worse…
Distribution executives at major record labels told the Wall Street Journal that the disparity between iTunes and Amazon is often wider. Amazon accounts for just 6% to 10% of digital music sales on many weeks with Apple closer to 90%.
Deep discounts on Amazon, like the $5 Daily Deals are having some impact. But Pete Baltaxe, the director of Amazon's digital music store, wouldn't comment on how the promotion works. "If you look across the board, we have been very competitive on price," said Mr. Baltaxe. The daily deal is "a great way to get people excited about trying Amazon."
Some artists and others in the industry see Amazon's discounting differently. "Been working for nine months on something that will sell for 3.99 on Amazon MP3," the independent rock group Fleet Foxes wrote last month on its Twitter feed. "That's about the price of a whoopie cushion."
Just anecdotal, but I think it has to do with comfort level in using a service. Case in point: I have been unable to convince a family member of mine to at least TRY Amazon given the incredible discount prices. Her reason for not trying? a) it involves installing the Amazon downloader (“there’s already enough loaded on my computer!”) and b) what if it doesn’t work and I don’t get the music? Now, I have suggested practicing by finding a free track and downloading that first, but to no avail. With all the talk of how great digital is, the people who actually spend real money buying music tend to be middle aged or older, and they feel pretty proud of themselves just to have figured out iTunes.
It’s tough selling something when the customer has to go through training just to get the product in their hands (or on their computer).
Are these figures global or US-only?
US only.
Apple should enjoy this while it lasts. I think consumers will figure out that subscription services are a much better deal for getting access to lots of tracks and Amazon is much better for a la cart purchases.