iTunes Maintains Lead Among U.S. Music Retailers

Amazon improves year-over-year music retailer ranking, based on consumer purchases of CDs and digital music

According to the latest MusicWatch consumer surveys from The NPD Group, a leading market research company, the five leading music retailers in the U.S. for the first half of 2008 (January through June, based on purchases of CDs and a-la-carte digital music downloads) ranked as follows:

iTunes
Wal-Mart (Walmart, Walmart.com, Walmart Music Downloads)
Best Buy (Best Buy, Bestbuy.com, Best Buy Digital Music Store)
Amazon (Amazon.com, AmazonMP3.com)
Target (Target and Target.com)

NPD’s data reflects the ongoing consumer shift from physical CDs to digital music, as iTunes maintained their leadership position reached earlier this year. Amazon rose from fifth place to fourth primarily for two reasons: first, online CD sales have seen less erosion than CD sales at brick-and-mortar stores; and second, Amazon launched its digital music store, Amazon.mp3, last year.

“We expect Apple will consolidate its lead in the retail music market, as CD sales continue to slow,” said Russ Crupnick, entertainment industry analyst for The NPD Group. “Amazon’s CD buyers tend to be older, so they haven’t abandoned the CD format to the extent seen in the average music buyer. Plus Amazon’s successful introduction of its digital download store will help the company improve its position in the future.”

The information in this press release was derived from surveys of U.S. consumers, age 13 and older, reporting on their purchases of physical product (CDs), digital music, and wireless over-the-air (OTA) transactions — excluding ringtones. Purchases from retailer Web sites and brick-and-mortar stores are combined in this ranking. Note: NPD uses an equivalency of 12 single-track downloads per CD, for retailers who sell digital music as single tracks. In addition, NPD only tracks digital music sold by the song or album, not music purchased under subscription from services like eMusic, or subscription revenues from Rhapsody and Napster.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless.