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Wed, Jan 07, 2009 - 07:53 PM EST  —  AAPL: 91.01 (-2.01, -2.16%)  |  NASDAQ: 1599.06 (-53.32, -3.23%)

NPD: Amazon has about one tenth the market share of Apple’s iTunes Store
Thursday, April 17, 2008 - 01:31 PM EST

"If you pan back and look at how people are getting their music these days you see that the companies fighting for the people who pay for music are battling over an ever-smaller piece of the pie," Saul Hansell blogs for The New York Times.

"NPD’s annual survey of Internet users, which is some 80 percent of the population these days, found that 10 percent of the music they acquired last year came from paid downloads. That is a big increase from 7 percent in 2006. But since the number of physical CDs they bought plummeted, the overall share of music they paid for fell to 42 percent from 48 percent," Hansell reports.

"NPD’s data about how well Amazon.com’s five month old digital music store is doing made me wonder about the bigger picture of how Amazon and Apple fit into that overall music market," Hansell reports. "The music industry has high hopes for Amazon. All four major labels are allowing it to sell their songs as MP3 files, without any protection against illegal copying. Their goal is to win over some people who may have been stealing music and also to create a counterbalance against Apple, which some in the music industry believe has too much power."

"The NPD data for February show that so far Amazon has had a strong start, although it is still tiny. It now has one tenth the market share of Apple. Since Apple has largely dominated the per-track download sales, that makes Amazon the distant No.2 in the market, said Russ Crupnick, who runs NPD’s music service," Hansell reports.

More in the full article, including a slide that puts into perspective how people are listening to music these days, here.


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Apr 17, 08 - 12:38 pm Comment from: bon

I love iTunes, and I despise how the labels give Amazon DRM-free music while withholding it from iTS, but in the end, competition is good.

Apr 17, 08 - 12:43 pm Comment from: silverwarloc

competion is good...as long as its a level playing field. I just hope these labels could get their heads out of their asses.

Apr 17, 08 - 12:45 pm Comment from: R2

It would be a competition if iTunes was able to sell all of its tracks DRM-free.

As is, it's not a competition. It's the labels propping up a front with underhanded tactics. And they're still losing.

Apr 17, 08 - 12:47 pm Comment from: Cubert

@bon,
Me too. The record labels act like a bunch of spoiled bratty kids who are pissed off that they didn't come up with the idea first. Now that iTunes is popular they are kicking themselves and throwing hissy fits.

Apr 17, 08 - 12:48 pm Comment from: DogGone

Odd - 10 percent of the market in 5 months is pretty good to me. Apple have less in the phone or PC market.

Apple may start losing a lot of market share because they are not allowed to sell DRM-free material from all labels and are charged more.

Then the gov't or lawyers should step in and stop the collusion to reduce Apple's performance.

Apr 17, 08 - 12:51 pm Comment from: Synthmeister

As long as Amazon doesn't suddenly overtake iTunes, this situation is a good thing. The labels think they're undermining Apple's dominance in the digital medium market but they are also undermining their own ability to force DRM down our throats!

Apple sells iPods either way.

Apr 17, 08 - 01:00 pm Comment from: shen

maybe more people would buy their music if they offered new music that wasn't "american idol: craptastic kids mange hits of the past"

ya know, just thinking aloud here.

Apr 17, 08 - 01:06 pm Comment from: ChrissyOne

There are still 2 very important points here -

1. Amazon music plays on iPods
2. Amazon does not make their own player

So it really doesn't matter how much music they sell. Chances are, most of it will end up on iPods anyway. Win win.

Apr 17, 08 - 01:07 pm Comment from: Jeremy

I wouldn't be surprised to find out that Amazon's DRM free MP3's are actually *contributing* to pirate-like behaviour in teens.

If you use iTunes, the songs go right into iTunes and you have to know how to get them out and spend the time to do it. You can buy Amazon MP3's and they just download onto your desktop. I know *technically* DRM is DRM, but the iTunes eco-system is set up to promote purchasing and de-emphasize the possibilities of stealing.

Just another case of the music and media industries shooting themselves in the feet IMO. Swallow your pride and ask Apple to carry your music again and everyone will be happy.

Apr 17, 08 - 01:08 pm Comment from: Spark

They scream and scream about piracy. They demand and demand DRM, saying this is the only way to protect their product. They howl that Apple's 99-cents per song is just not enough. Yet they throw all of that aside to undermine Apple, the company that showed them the way out of the wilderness. The people running record companies are ungrateful, duplicitous and deceitful pricks. Amazon shares no blame in this, and they are doing what they should do. I wish someone would nail them for the collusion to damage Apple that they are perpetrating. If the record companies were able to succeed in knocking Apple out of its position of influence, you can bet that Amazon's non-DRM, 89-cent downloads would disappear in short order.

Apr 17, 08 - 01:09 pm Comment from: ChrissyOne

Oh, and as of right now, 8 of the top-10 and 16 of the top-25 selling MP3 players on Amazon are iPods.

Suck on that, MAC dorks.

Apr 17, 08 - 01:11 pm Comment from: ChrissyOne

@ Jeremy

Yeah... no. You don't have to know how to 'get them out'. You just drag them from the App window to the desktop to copy them like any other app.

Apr 17, 08 - 01:11 pm Comment from: Jubei

Anyone who says that competition between Amazon and Apple is good is a sucker fooled by the Labels. Level the playing field, then you can say competition is good. What Amazon and the Labels are doing is trying to sabotage Apple. Plain and simple.

Apr 17, 08 - 01:15 pm Comment from: ChrissyOne

@ Jubei

Of course they are. But the thing is - it''s not working.

Apr 17, 08 - 01:19 pm Comment from: Chris

@ChrissyOne,
Apparently Jeremy didn't know that, and that pretty much proves his point!

Apr 17, 08 - 01:20 pm Comment from: Ralph M

Apple claims it runs iTunes at just above break-even, and it does so to fuel iPod sales, from which Apple makes A LOT of money. If that is true, Amazon's sales of DRM-free music, most of which is headed to iPods, is good thing. What isn't a good thing is the illegal collusion between the music companies that is keeping DRM-free music off of the iTMS. At some point, I see Apple/Steve doing something about this, especially since Apple is now the largest retailer of music on Planet Earth. Frankly, I'd like to see another "open letter" -- but this time, addressed to the stockholders of the colluding music companies, suggesting that their investments are suffering due to the unwillingness of management to negotiate fairly with Apple.

Apr 17, 08 - 01:23 pm Comment from: ChrissyOne

@ Chris

Guess so!

Apr 17, 08 - 01:24 pm Comment from: Macromancer

This situation is so whacked out. The labels, in fear of iTunes, sell better tracks to Amazon, so as to create more competition, so they can have more leverage against Apple to force Apple to raise their prices.

On us.

Yeah competition is good, but in the end, this isn't that great for consumers. It's all about greed, once again, of the labels.

Apr 17, 08 - 01:28 pm Comment from: Sarasota

256 Mhz and no DRM versus 128 Mhz and DRM?

Yes, I made the switch to Amazon.

Apr 17, 08 - 01:33 pm Comment from: Jubei

See. Sarasota is a fine example of the Labels & Amazon shenanigans working perfectly.

Apr 17, 08 - 01:43 pm Comment from: Mac-nugget

DRM or no DRM Apple has the edge. Amazon does not have a setup box like the Apple TV, nor do they have the iPhone or any of the iPods. Sure, you can use Amazon material to interact with these devices to an extent, but people like connivance. For the average user, DRM dose not mean that much, unless they intend to "share" such media. But to me Apple DRM has not been much of a hinderance and this DRM free media is not all that it's cracked up to be. Where are you going to use this DRM free material from Amazon? Probably in an Apple branded device.

I have a friend that is a such Windows user. He saw my iPod like 2 years ago and dismissed it as an expensive MP3 player. His daughter got one of the new Nanos let last year, and this sparked his interest. A couple of weeks ago he calls me on the Phone trying to learn as much about iTunes as he him self had bought an 80 GB iPod Classic. Now he is a fan. The funny part is that he never asked about Amazon and I would think that a lot of other people are just like him. The Amazon/iPod connection is not very prevalent as far as mind share goes. So I don't think Apple has much to worry unless this somehow changes.

Apr 17, 08 - 01:44 pm Comment from: Binky

I think we should deport all Shenanigans back to Ireland and hire more Mexicans.

Apr 17, 08 - 01:46 pm Comment from: dallas

For get Apple and Amazon. Im still buying CDs from Half.com. You can find just about any album you want for less than $10. (Prices start high, but fall quickly after a few months. This is much cheaper than Apple or Amazon MP3. And I personally like buying albums. Some of my favorite songs are songs that I hadn't ever heard before buying the Album.

Apr 17, 08 - 01:50 pm Comment from: bizaro

http://www.youtube.com/watch?v=sPv8PPl7ANU

Apr 17, 08 - 01:52 pm Comment from: ChrissyOne

Note: Shenanigans requires you to have at least 15 pieces of flair.

Apr 17, 08 - 01:54 pm Comment from: John

Pan is a term (both audio and video) referring to _side to side_ motion. Saying "pan back" is a ridiculous statement. Dolly back, zoom out, whatever, but not pan back.

I wouldn't mind if this were in a blog, but in the NY Times?! Geez.

Apr 17, 08 - 01:56 pm Comment from: iamdj

It's COLLUSION pure and simple and Apple has a case.

Apr 17, 08 - 02:01 pm Comment from: iamdj

Oh yeah, one more thing, the big "record labels" (more like mega-super-companies) will be irrelevant very soon, as far as NEW music goes.

More and more musicians will simple produce and sell their music on their own. It's awesome.

Apr 17, 08 - 02:10 pm Comment from: Yves

I too prefer buying cheap CDs from Amazon, rip the songs at high quality 256 Kbps rate, and store the CDs away.

I think ChrissyOne is hot. grin

Apr 17, 08 - 02:18 pm Comment from: James

Uh . . . 256 MHZ, Sarasota? That statement negates your opinion in and of itself there, buddy.

Apr 17, 08 - 03:47 pm Comment from: Mr. Peabody

At least Amazon is in there, competing, and making it not just iPod compatible, but iTunes compatible as well. I think Apple has finally made the point that, if you want to compete with them it's going to be on their turf from now on - Not MS, not Real, not et. al. If you want to sell music on the internet it's going to have to be plug'nPlay iPod and iTunes.

Apr 17, 08 - 04:57 pm Comment from: Hm...

Amused and amazed I am at the unceasing greed of the major labels. They should be spanked soundly and sent to bed to quietly think on their sins.

Apr 17, 08 - 05:05 pm Comment from: Mac-nugget

The most ironic part of this is that by not providing iTunes with DAM free music. They are insuring that the percent iTunes consumer will stick with Apple/iPod/iTunes or risk having to purchase all their music again if they decide to switch MP3 players. DRM dose not affect Apple, quite the contrary. These idiots thought that by selling DRM free music elsewhere people were all of a sudden going to drop iTunes. When in fact this very disparity will further lock users in to it.

Apr 17, 08 - 05:12 pm Comment from: obtusegoose

I have no intention to buy digital music from Amazon until the music cartels allow Apple to sell DRM-free music too. What they're doing amounts to sleazy business practices, and I won't reward them for doing it.

Apr 17, 08 - 06:11 pm Comment from: Jubei

@obtusegoose

I'm with you on that one! grin

Apr 17, 08 - 07:39 pm Comment from: me

“Amazon music plays on iPods”

That’s true but it also plays on any media player unlike iTunes. I’m an iPod user now but I’ll never use iTunes because I realise that some time in the future I may want to buy a media player from somebody else.

Anyway I don’t think Apple will care that much. The days of them making huge profits from iPods are numbered, the iPhone is the future.

Apr 17, 08 - 08:35 pm Comment from: limey

@me - You make no sense...

"I’m an iPod user now but I’ll never use iTunes because I realise that some time in the future I may want to buy a media player from somebody else."

That's like spiting your nose by cutting off your foot. What I think you mean is you don't buy from the iTunes Store. Why would you not use iTunes (the program?)

then you hit the jackpot...

"The days of them making huge profits from iPods are numbered, the iPhone is the future."

The iPhone IS an iPod, duh!

Apr 17, 08 - 09:35 pm Comment from: me

@limey

"I’m an iPod user now but I’ll never use iTunes because I realise that some time in the future I may want to buy a media player from somebody else."

That's exactly what I mean. There are a hundred programs out there that sync with an iPod and if you don't use the iTunes store it's just a matter of personal preference. Get out a little for gods sake and try something new, SJ will forgive you.

"The iPhone IS an iPod, duh!"

Eeek, you are lost. It's in a completely different market and that's why it has a chance at making some money.

Apr 17, 08 - 09:37 pm Comment from: DogGone

Chrissy is hot especially at 25 Kbps. Sorry MHz - what was I thinking!

@me - WTF!?! Exactly which media player do YOU use to sync your songs with your iPod? I call BS

Apr 17, 08 - 10:05 pm Comment from: me

I use Amarok (Linux user) but I’m told Winamp works fine too.

Don’t get me wrong I do like Apple hardware, I have an iPod and am considering getting the next iMac (I like the all in one idea). I’m just not big on Apple software.

Apr 18, 08 - 12:46 am Comment from: mcdruid

The NPD group doesn't measure eMusic sales, so the claim that Amazon is #2 is probably wrong.

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