Apple briefly held position as No. 1 US music retailer - report

[AppleInsider]

Apple confirmed Thursday that the iTunes Store has surpassed Wal-Mart to become the number one music retailer in the US, based on the latest data from the NPD Group. [Updated with info from Apple press release.]

“We launched iTunes less than five years ago, and it has now become the number one music retailer in the world,” said Eddy Cue, Apple’s vice president of iTunes said in a statement. “We are thrilled, and would like to thank all of our customers for helping us reach this incredible milestone.”

NPD ranks music retailers based on data from its MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions. The iTunes Store became the largest music retailer in the US based on the amount of music sold during January and February 2008.

The announcement confirms an earlier report from ArsTechnica which revealed that the iTunes operator garnered a 19 percent share of all US-based retail music sales in January, good enough to push it past industry leader Wal-Mart, which captured a 15 percent share for the same period.

Apple's surge to the No. 1 spot comes just one month after the company reported passing Best Buy to become the No. 2 US music retailer.

What's of particular interest from Ars's earlier report is that it includes an NPD chart of the top 10 music retailers from January with their associated share of the market. NPD declined to release those specific share percentages back in February when Apple definitively claimed the No. 2 spot.

US music retailer rankings for one week in January | Source: ArsTechnica

Not only does the chart reveal Amazon to be a distant fourth in the rankings behind Apple, Wal-mart, and Best Buy with its 6 percent share, it more importantly shows the approximate level of separation between the top players.

[ View this article at AppleInsider.com ]

[Bageljoey]

You don't often see a graph where "other" is 50% higher than the #1 spot...

[MacsRGood4U]

well it's good to see someone doing their homework. this story is being misreported all over the web from macrumors to arstechnica itself. yes apple was the #1 for a few days, but it is NOT YET reigning #1 because Apple itself said in february that it was number two, not number 1

http://www.apple.com/pr/library/2008/02/26itunes.html

M

[Booga]

Where is Microsoft and all those Zune sales??!?!

[joek]

well it's good to see someone doing their homework. this story is being misreported all over the web from macrumors to arstechnica itself. yes apple was the #1 for a few days, but it is NOT YET reigning #1 because Apple itself said in february that it was number two, not number 1

how do you know the February press release wasn't reporting on December data?

[DeaPeaJay]

Wow, that's incredible. I never would have thought Apple would get that close to Wal-Mart that quickly.

[Superbass]

Hey, at what point is it possible to say Apple is an enormous profit-motivated corporation where the bottom line comes in front of quality, American Jobs at fair wages, conscientious politics and the environment without being called a troll? They're in Slave-mart territory now, do I need to wait until Hu Jintao gives Jobs a presidential medal?

[slapppy]

Originally Posted by Booga

Where is Microsoft and all those Zune sales??!?!

It's probably in the -1 scale.

[Robin Huber]

Even more impressive is that Apple does this largely by selling songs individually, whereas the big brick and mortar stores are selling songs by the bundle--a CD. Or am I wrong in this assumption?

[minderbinder]

Originally Posted by Superbass

Hey, at what point is it possible to say Apple is an enormous profit-motivated corporation where the bottom line comes in front of quality, American Jobs at fair wages, conscientious politics and the environment without being called a troll? They're in Slave-mart territory now, do I need to wait until Hu Jintao gives Jobs a presidential medal?

If you REALLY want to avoid being called a troll, you could start by finding a thread where a rant like that isn't completely off-topic.

[AImanchi]

Amazon will get up there soon

[SpamSandwich]

Originally Posted by Superbass

Hey, at what point is it possible to say Apple is an enormous profit-motivated corporation where the bottom line comes in front of quality, American Jobs at fair wages, conscientious politics and the environment without being called a troll? They're in Slave-mart territory now, do I need to wait until Hu Jintao gives Jobs a presidential medal?

You really don't understand business, do you? Why don't you quit whining and start a company. You'll learn very quickly that your views are distorted by a belief that the world owes you something.

[caliminius]

Are these rankings based on revenue or simply on unit sales? I'm guessing the latter because the tables are labeled as "equivilized" which I'm guessing uses that whole 10 tracks equals an album math (I believe that's the number I remember seeing being used before).

If so, this would give iTunes a huge advantage as a 15 track album would then get counted as 1 1/2 albums whereas any brick and mortar sale of that album still counts as a mere 1.

And where do iTunes weekly 3 free tracks count in this process? Do they count as sales used for these rankings as this would again give iTunes a huge artificiail advantage?

[satchmo]

Originally Posted by AImanchi

Amazon will get up there soon

I was wondering about that. There's been a lot of talk that Amazon and their cheaper, rights free MP3's was really taking off. That Apple had better react to this new threat.

Perhaps this story isn't as current as the actual situation taking place...or the Amazon surge is not as great as it's been touted.

[echosonic]

Originally Posted by Superbass

Hey, at what point is it possible to say Apple is an enormous profit-motivated corporation where the bottom line comes in front of quality, American Jobs at fair wages, conscientious politics and the environment without being called a troll? They're in Slave-mart territory now, do I need to wait until Hu Jintao gives Jobs a presidential medal?

No you did not.

1. Apple has no business being politically active in any way shape or form (fascist)
2. They are anyway (Al Gore) and since you sound like a liberal you should be very happy about it
3. They ARE environmentally sound, but not willing to suffer the extreme nutjob activists
4. "American Jobs at fair wages?" Get real. Go bitch to your california and National lawmakers who drove Apple to seek overseas manufacturing in the first place you socialist.
5. "...bottom line comes in front of quality..." This clearly proves you don't have the first clue what you're talking about. Quality indeed.

[palter]

See http://www.apple.com/pr/library/2008/04/03itunes.html

While the first paragraph says "in the US", the quote in paragraph two says "in the world".

[Cintos]

Originally Posted by MacsRGood4U

well it's good to see someone doing their homework. this story is being misreported all over the web from macrumors to arstechnica itself. yes apple was the #1 for a few days, but it is NOT YET reigning #1 because Apple itself said in february that it was number two, not number 1

http://www.apple.com/pr/library/2008/02/26itunes.html

M

Greetings:

Actually Apple has just issued a news release confirming the #1 spot as a solid reality:

iTunes Store now top US music retailer
Based on the latest data from the NPD Group’s Music Watch survey, the iTunes Store surpassed Wal-Mart to become the number one music retailer in the US, Apple today announced. “We launched iTunes less than five years ago, and it has now become the number one music retailer in the world,” said Eddy Cue, Apple’s vice president of iTunes. “We are thrilled, and would like to thank all of our customers for helping us reach this incredible milestone.” [Apr 03, 2008]

http://www.apple.com/pr/library/2008...tml?sr=hotnews

- Cintos

[concentricity]

What's most interesting to me is that since we know Apple only sells online, the 19% total equates to about 65% of all paid downloads. And while the Amazon figure (6%) isn't broken down into physical vs download, even if it were all downloads, that's only 20% of legal downloads. I'm sure the VAST majority of Amazon CD sales are still physical media.

I'm really curious to see if we'll be able to get similar data in subsequent months, and if Amazon sales will ever be broken out into physical vs download. Hopefully whatever the numbers are, this continues to put pressure on everyone to go DRM-free.

[aaarrrgggh]

Now Apple needs to just demand no-DRM and higher quality for all their tracks. Expect Wal-Mart to quickly cut shelf space for CDs and Target, Best Buy, and others to follow suite, since they use CDs as a loss-leader.

Amazing how much the record labels have fcuk'd themselves in the past ten years!

[SpamSandwich]

Huge news for AAPL stock owners and it looks like the market likes it too!

[lostkiwi]

Originally Posted by aaarrrgggh

Now Apple needs to just demand no-DRM and higher quality for all their tracks. Expect Wal-Mart to quickly cut shelf space for CDs and Target, Best Buy, and others to follow suite, since they use CDs as a loss-leader.

Amazing how much the record labels have fcuk'd themselves in the past ten years!

I think you will find Apple is demanding the end of DRM and have done for some time. It's up to the idiotic Labels to let Apple sell all their music as iTunes Plus instead of just EMI. It could be argued that EMI is allowed by the bigger labels to sell iTunes Plus because they are trying not to be sued for collusion.. but that would be just unfounded speculation..

[Phizz]

I'd be interested in seeing a similar chart for the UK. Anybody know if one exists?

[echosonic]

Originally Posted by aaarrrgggh

Now Apple needs to just demand no-DRM and higher quality for all their tracks. Expect Wal-Mart to quickly cut shelf space for CDs and Target, Best Buy, and others to follow suite, since they use CDs as a loss-leader.

Amazing how much the record labels have fcuk'd themselves in the past ten years!

Actually, I'll bet you they dont have to do squat with DRM.

Look where they are WITH DRM.

Why would they remove it when they can win while keeping it right where it is and avoiding the label headaches?

Some of you who just hate the labels tend to forget that there are artists out there who compose the music you want to steal.

Yes, if you want to get it without paying for it, then its stealing, no matter how petty you think it is.

[Frank777]

Yes, it's the labels that need to drop the DRM on Apple Store purchases fast.

Otherwise, they are just building each and every Apple song sale into a monopoly that will eventually hardball them worse than Walmart ever did.

[Superbass]

Originally Posted by echosonic

1. Apple has no business being politically active in any way shape or form (fascist)

I guess you're right, it would really be fascist to refuse to deal with China just because they're among the worst violators of human rights in the industrialized world and don't allow democratic elections... It's our American duty to support foreign dictators, I guess. Oh, wait a minute, isn't supporting fascists fascist in itself?

Originally Posted by echosonic

2. They are anyway (Al Gore) and since you sound like a liberal you should be very happy about it

When did Apple support Al Gore? And when did Al Gore become a liberal? Maybe you should take a look at the developed world outside of the USA before you decide what liberal is, pal.

Originally Posted by echosonic

3. They ARE environmentally sound, but not willing to suffer the extreme nutjob activists

Environmentally sound my ass. Apple is behind a lot of manufacturers including Dell and Sony in eliminating toxic, non-recyclables from their manufacturing process - the fact that they have a "free recycling program" is just PR, as the majority their systems are non-recyclable and just end up in dumps. By-products of their manufacturing facilities in China amount to an estimated 50 million tons of waste per year...I wouldn't call that environmentally sound.... But, that's one of the great benefits of locating manufacturing facilities in Asia (avoding America's already deplorable environmental policy) along with:

Originally Posted by echosonic

4. "American Jobs at fair wages?" Get real. Go bitch to your california and National lawmakers who drove
Apple to seek overseas manufacturing in the first place you socialist.

Wow, you're right, that increase in the minimum wage to $6.15 per hour plus overtime if someone works more than 39.5 hours per week was so terrible that Apple was perfectly justified in moving operations to China where they could cut deals with lawmakers there to pay $2 an hour with no overtime instead... It's amazing to hear anyone say that factory workers in America are overpaid- I guess you a Limbaugh fan.

Originally Posted by echosonic

5. "...bottom line comes in front of quality..." This clearly proves you don't have the first clue what you're talking about. Quality indeed.

Well, last I checked, Apple is releasing updates and patches that remind me of the early days of Windows XP, and there have been plenty of threads on AI lately bemoaning the lower quality inherent in a lot of current Apple Products (iMac 20", MacBook Pros, etc) Has Apple's quality improved over the past 10 years? Shouldn't we want it to as Mac users?

I prefer to believe that if you're not part of the solution, you're part of the problem... Apple beating Wal*Mart's sales figures is nothing to be proud of when you think of what it costs beyond the stock value and sticker price...

[Rot'nApple]

Originally Posted by SpamSandwich

Huge news for AAPL stock owners and it looks like the market likes it too!

AAPL still is $48.00 a share shy of where it was just three and a half short months ago, but thanks to positive news like this, it has gained $26.00 a share where it used to be.

[aaarrrgggh]

[QUOTE=echosonic;1236859]Actually, I'll bet you they dont have to do squat with DRM.

Look where they are WITH DRM.

Why would they remove it when they can win while keeping it right where it is and avoiding the label headaches?/QUOTE]

...because sales revenue is dropping for the labels. There are plenty of hold-out consumers that object to paying the same price as a CD for a download that isn't playable on a stereo for quality reasons. When these people can't buy CDs, they stop buying altogether. Each retailer that gets out of the CD business is essentially 80-100% lost sales, making the problem worse.

I know I can't be the only one, anyway...

[quinney]

Originally Posted by Superbass

I prefer to believe that if you're not part of the solution, you're part of the problem...

Binary thinking will not earn you any credibility points. The real world is much more
nuanced than you say you prefer to believe. By demanding absolute purity you only
marginalize yourself and guarantee you will not accomplish much.

[melgross]

Originally Posted by Bageljoey

You don't often see a graph where "other" is 50% higher than the #1 spot...

It's also true in computer marketshare, at least worldwide. It's normally true here in the US as well, but I haven't looked at the most recent numbers.

[melgross]

Originally Posted by Superbass

Hey, at what point is it possible to say Apple is an enormous profit-motivated corporation where the bottom line comes in front of quality, American Jobs at fair wages, conscientious politics and the environment without being called a troll? They're in Slave-mart territory now, do I need to wait until Hu Jintao gives Jobs a presidential medal?

So you're saying that Apple is like every other company in the world?

What shock!!!

[melgross]

Originally Posted by satchmo

I was wondering about that. There's been a lot of talk that Amazon and their cheaper, rights free MP3's was really taking off. That Apple had better react to this new threat.

Perhaps this story isn't as current as the actual situation taking place...or the Amazon surge is not as great as it's been touted.

It takes a while to build a business.

We have to know where Amazon was before taking on the DRM-free download.

I also have been saying for a while that most people don't care about DRM, as long as it isn't too obtrusive, and Apple's isn't.

Also, most people don't care if their music is at 128K/s quality.

All of that is the reason why most of Apple's iTunes customers haven't defected.

And also remember that Amazon's MPG's are iTunes friendly. They are almost as easy to integrate into iTunes as the AAC downloads bought from Apple.

We need several more months to sort this out.

But, it's interesting to note that downloads are now almost 30% of the music market. That' more than twice the percentage of last year.

[melgross]

Originally Posted by SpamSandwich

Huge news for AAPL stock owners and it looks like the market likes it too!

I don't know. Most of the tech sector went up today. While MS and Google went down, even Dell went up.

[melgross]

Originally Posted by Rot'nApple

AAPL still is $48.00 a share shy of where it was just three and a half short months ago, but thanks to positive news like this, it has gained $26.00 a share where it used to be.

Actually, it's gained more than that. From a low (closing) of $119.15 to a new price (closing) of $151.61 is a rise of $32.46.

If we look at the intra day pricing, it went from $115.44 to $153.63, a rise of $38.19.

The latter numbers are more valuble for trading purposes than the closing prices are.

While as a consumer company with fairly expensive products, it took a whupping because of the economic situation, but it's coming back pretty well.

[caliminius]

Sorry, but as I've already stated, the methodology for the rankings favors iTunes. I didn't notice it initially, but the article states that 12 downloaded tracks are used to equal one CD which easily shortchanges brick and mortar sales versus iTunes sales.

As examples, look at 2 new releases: R.E.M.'s Accelerate and Janet Jackson's "Discipline." The R.E.M. album contains 15 tracks, so for every copy of that album iTunes sells, it will end up getting counted as 1.25 albums sold. iTunes only has to sell 80% of what a brick and mortar sales to have the same "equivilated" sales level. The Janet Jackson album is even worse for brick and mortar retailers as it contains 22 tracks, which means iTunes will get credit for 1.67 album sales for every sale of the full album.

I know you could also throw out examples of albums that have less than 12 tracks, but does it equal out? When I did a brief look at the new releases in iTunes, most albums had at least 12 tracks, many had more, and the lowest I saw was 10 except for a single track "album." Then you also have to wonder about 2-CD albums. I doubt there's any way for these numbers to reflect that it was a 2-CD album, so again this ends up a strike against brick and mortar sales and an advantage for iTunes where that album will easily end up being 2+ albums worth of sales.

Likewise, everyone keeps ignoring the free songs available every week on iTunes. The U.S. store usually offers 3 free tracks every week. So for every user who downloads all 3, iTunes could conceivably get credited another 1/4 of an album. It's never been stated whether Apple includes those songs in their counts of songs sold, so it's very possible that much of iTunes sales surge is really based on faulty logic and inaccurate sales reporting.

I'm not disputing that actual iTunes sales are increasing, I'm just arguing how much of it is a real increase and how much of it is artificial based on free songs and failings of the 12:1 track-to-album conversion.

[iCarbon]

I think that your argument that 12 tracks does not equal an album is completely valid, but I'm not so sure that you've got it going in the right direction. Listen to the average pop album, and you'll notice something... not all the tracks are any good. In fact, my understanding is that most consumers buy albums for a very small number of tracks (1-3), making even a "5 tracks = 1 album" argument hold a certain amount of validity.

I guess what I'm trying to say is that there really is no perfect comparison point -- we're comparing apples and pears, they're very similar, but fundamentally different.

just my 2 cents.

[anantksundaram]

Originally Posted by SpamSandwich

You really don't understand business, do you? Why don't you quit whining and start a company. You'll learn very quickly that your views are distorted by a belief that the world owes you something.

I think I will quote that! (With appropriate attribution, of course).

[ikir]

Well done Apple!

[ascii]

By refusing to adopt new technology and stubbornly sticking to their old business models, the existing retailers left the door wide open for Apple (or whomever). Serves them right, next time don't be such luddites.

[solipsism]

Originally Posted by iCarbon

I think that your argument that 12 tracks does not equal an album is completely valid, but I'm not so sure that you've got it going in the right direction. Listen to the average pop album, and you'll notice something... not all the tracks are any good. In fact, my understanding is that most consumers buy albums for a very small number of tracks (1-3), making even a "5 tracks = 1 album" argument hold a certain amount of validity.

I guess what I'm trying to say is that there really is no perfect comparison point -- we're comparing apples and pears, they're very similar, but fundamentally different.

just my 2 cents.

There is no perfect comparison, and this current measure that 12 tracks equals 1 album is clearly in WalMart's favor for the reason you stated above. Which makes the push into digital downloads even more impressive.

[bigpics]

Originally Posted by Superbass

And when did Al Gore become a liberal?

Oh, I don't know. Given his family background, maybe in the womb??

A more relevant question maybe is when he decided that the data he wanted to highlight, and only the data he wanted to highlight, about the environment even existed and moved over into the "big lie" camp, as in Stalin's "tell a big lie often enough and it will become the truth.

And no, I'm not a "climate change denier," I simply detest those who turn scientific debates into propaganda political causes.