Apple overtakes Wal-Mart as lead music seller

Source: Retail Digital

Date :07/04/2008 07:12:21

Apple has announced that music sales from its iTunes Music Store now eclipse CD sales from Wal-Mart as the impact of the music download era hits home.

The latest data released by the NPD Group in February indicates that iTunes has over 50 million customers, cumulative recorded sales exceeding 4 billion, and a music library over the 6 million song mark.

Apple has made the comparison against Wal-Mart’s music sales in January and February of this year, counting twelve individual songs as a single CD album.

“It underscores a very important trend in the industry,” said Michael Gartenberg, vice president and research director at Jupiter Research. “It wasn’t that long ago that Apple was proud of the fact that they were number four and rising.”

“Now everyone is going to be looking at how to take a piece of that away from Apple,” he added.

Online trend

The emergence of online music stores and the growing popularity of digital music formats such as MP3 and AAC-encoded MP4 files have encouraged a change in music purchasing habits. Consumers are seen as more likely to purchase individual songs rather than entire albums, which undercuts traditional music industry pricing.

Music labels are struggling against this wave of digital music and the constant issues of piracy and DRM controversy. “It’s not good for their profit margins because they don’t make much off iTunes at all,” said Rolling Stone business reporter Steve Knopper. “They used to sell, eight to ten years ago – and even to a certain extent today - $18 CDs. They had a huge margin on these.”

April 7, 2008