iTunes Still Well Ahead of Amazon MP3 Store

Reuters reports on the latest data tracking digital music downloads. Specifically, they look at Amazon's MP3 downloads after a full year of sales. According to their data, Amazon remains a distant second to iTunes:

Major-label sources say that they had hoped the company would have fared better than it did. Amazon has yet to release any sales figures for digital music, and it did not respond to interview requests for this story. But Piper Jaffray financial analyst Gene Munster estimates that Amazon will sell 130 million tracks this year -- a paltry sum compared with the 2.4 billion songs iTunes is expected to sell in 2008.

This brings Amazon's estimate to only 8 percent of the digital music download market share without any major gains. This lack of success could influence record labels in their ongoing negotiations with Apple. Amazon MP3 offerings have been seen by music studios as a way to reduce Apple's foothold in the digital download market. Unlike Apple, Amazon has had access to DRM-free song licensing from all of the major record labels. The labels are still hoping that Amazon will gain ground over the next year.

The labels are said to be demanding more concessions from Apple as they negotiate for DRM-free music in the iTunes Store. Possibilities include variable track pricing and watermarking of individual tracks.