Apple Inc (AAPL)

[Bootz]

Apple owns 66% of online music market, Amazon second at 13%

By Jacqui Cheng

Despite unrelenting competition from numerous online music vendors—particularly Amazon—iTunes has managed to actually increase its market share. The music service now makes up 66.2 percent of the online music market, according to new numbers from NPD, with Amazon coming in second with 13.3 percent for the third quarter of 2010.

iTunes has managed to increase its share from 63.2 percent earlier this year, even as Amazon has made aggressive efforts to chip away at iTunes' customer base and artist exclusives. In fact, Amazon was so good at pushing its "Daily Deal" promotions (deeply discounted albums of hot bands) that Apple apparently felt threatened by it—an anonymous music industry exec said earlier this year that Apple was stepping up pressure on artists to avoid Amazon's music promotions, lest they lose their valuable marketing support from iTunes.

It appears that iTunes' growth doesn't seem to have come at the expense of Amazon's, however. Amazon's share of the music market also increased from 11 percent earlier this year, when it was tied with Walmart for second place in the US. Both music stores are pulling ahead, likely because (at least according to a previous NPD report) the two stores cater to their own user bases.

The online music market as a whole has grown slightly over the past year, too: according to the latest Billboard numbers, 1 billion tracks have been sold in the US so far in 2010, an 0.3 percent increase from 2009. Even better, the sale of albums online has increased by 13 percent. But, like the music industry's UK counterparts, those increases have yet to make up for the the continued decline of CD sales in the US, which have dropped by 20 percent this year alone.

http://arstechnica.com/apple/news/2010/12/apple-owns-66-of-online-music-market-amazon-second-at-13.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss