iTunes holds US music retail lead

iTunes remains the leading US music retailer – exceeding former leader Wal-Mart once again, according to the latest figures from NPD MusicWatch.

New research reveals the top five music vendors for the first half of 2008 (January through June, based on purchases of CDs and a-la-carte digital music downloads) ranked as follows:

1. iTunes
2. Wal-Mart
3. Best Buy
4. Amazon
5. Target.

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, the analysts note.

“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 data was derived from surveys of US consumers, age 13 and older, reporting on their purchases of physical product (CDs), digital music, and wireless over-the-air (OTA) transactions, excluding ringtones. NPD only tracks digital music sold by the song or album, not subscription-based music purchases.

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