Sales: iTunes Becomes No. 2 Music Retailer Despite Majors' Efforts

Sales

iTunes Becomes No. 2 Music Retailer Despite Majors' Efforts

According to research by the NPD Group, the iTunes Store was the second-largest music retailer in the United States last year, behind only Wal-Mart. iTunes leapfrogged over Best Buy and Target—which came in second and third, respectively, to iTunes' fourth place the last time the NPD Group conducted their music-buying survey—as paid downloading experienced an overall spike of 50% between 2006 and 2007. Those downloads now make up 10% of all music sales, although unsurprisingly the rise in downloads didn't make up for the plunge experienced by CD tallies throughout the course of the year. Related to that, NPD is claiming that one million people just stopped buying CDs completely last year; maybe it's because of my scouring Soundscan during the year, but does that number seem a bit low to anyone else? [Reuters; HT Chris Molanphy]

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1:15 PM on Tue Feb 26 2008
By Maura Johnston
283 views
9 comments

Comments

by loudersoft at 01:31 PM on 02/26/08
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I think artists, more and more, are fudging their Soundscan sheets on the road so they don't have to report income made from that extra dollar keeping them alive on tour. The business need for, and our cultural obsession with, Soundscan doesn't serve every kind of artist out there. I don't think we can get a truly accurate number from anyone as to where CD sales really are because there's no direct accounting going on anywhere except in retailers, online or otherwise. Bands sell lots of CD's and merch on tour, particularly lesser-known ones.
by capnbecki at 01:40 PM on 02/26/08
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I thought you had to pay for the equipment to collect Soundscan numbers on the road? May be why they can't count those sales. Many smaller labels sell the bands some CDs at cost or 50% of cost for tour and let them keep all the profits.
by noamjamski at 01:44 PM on 02/26/08
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@capnbecki: Unless things have changed, or it is an issue of scale, I was allowed to write in my soundscan numbers back when I was a band on the road selling cds. It was in our interest with our distributor at the time to show more sales, so we actually fudged upward.
by loudersoft at 01:44 PM on 02/26/08
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@capnbecki: It's been a few years since I dealt with it, but we used to have to fill out "Soundscan Sheets". What they did with them once turned in is not something I'm clear on.
by Nicolars at 02:23 PM on 02/26/08
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I'm not really surprised that iTunes has overtaken Target and Best Buy, both of them seem to be devoting less and less floor space to cds.
by cfitzrandolph at 02:35 PM on 02/26/08
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Does anyone else think that maybe the big problem with this story isn't the fact that iTunes is the #2 music retailer, but that Wal-Mart is the #1?
by NoNewYork at 03:50 PM on 02/26/08
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funny, after holding out against downloading until college, last year i only bought 2 cds: the good the bad and the queen and the there will be blood soundtrack. huh. i'm everything i despised three years ago.
by the rich girls are... at 04:39 PM on 02/26/08
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@cfitzrandolph: Eh, Wal-Mart is the No. 1 retailer period. It's best just not to think about it too hard. There's nothing you can do about it. For now.

@NoNewYork: It happens to the best of us. Don't fret!
by mackro at 12:03 PM on 02/27/08
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I'm curiously what the sales for movies and DVDs are for the retailers in comparison to the CDs.

Technically, this isn't music related, but it definitely is music-industry related.