iTunes Maintains Digital Music Dominance Despite Amazon's Discounts

093456 amazon itunes comparison

The Wall Street Journal takes a look at the digital music download market, demonstrating how Amazon's strategy of deep discounts on certain content has been unable to dent Apple's massive market share held through its iTunes Store. Rather than Amazon taking share from Apple, the two companies appear to be consolidating their leads over smaller competitors.

Amazon's share of the paid digital-download market rose to 13.3% in the third quarter, from 11% the year earlier, according to estimates from research firm NPD Group. Meanwhile, iTunes' share rose to 66.2%, from 63.2%.

Distribution executives at record labels say the disparity between the two may be even steeper, with Amazon commanding just 6% to 10% of the market in any given week, and Apple closer to 90%.

The report points to Amazon's strategy of specific deep discounts, such as offering a new Kid Rock album for only $3.99, as examples of successful promotions run by Amazon to entice customers, but on a day-to-day basis iTunes continues to serve as the place customers turn to for their digital music.

Amazon's deep discounts tend to come in two forms: bargain basement deals such as monthly promotions of $5 albums that generally involve the music industry cutting wholesale prices for Amazon in order to support the pricing, and "Daily Deals" such as the Kid Rock offer in which Amazon pays normal wholesale prices typically in the $7-8 range but charges customers only $3.99, taking a loss in hopes of drawing customers in for additional purchases. Amazon had partnered with certain labels for one-day exclusives on some Daily Deal content, but earlier this year Apple reportedly pressured the labels into reducing their participation in the program and Amazon backtracked on the exclusive offerings. In response, federal investigators launched an antitrust inquiry into the digital music industry, including an examination of Apple's efforts to keep labels from participating in Amazon's program.

Overall, the market for digital download tracks appears to be stagnating, with Billboard seeing only 0.3% growth so far in 2010 with over 1 billion tracks sold. Digital album sales, however, continue to boom, growing 13% this year as sales of physical CD albums have declined 20%.

Related Forum: Mac Apps

Popular Stories

Beyond iPhone 13 Better Blue Face ID Single Camera Hole

Six Reasons to Wait for Next Year's iPhone 17

Thursday February 22, 2024 4:20 am PST by
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models concurrently, which is why we sometimes get rumored feature leaks so far ahead of launch. The iPhone 17 series is no different, and already we have some idea of what to expect from Apple's 2025 smartphone lineup. If you plan to skip...
General Apps Messages

iOS 17.4 to Add This 'Groundbreaking' New Messaging Feature

Friday February 23, 2024 5:05 am PST by
With iOS 17.4, set to arrive in March 2024, Apple is bringing a new cryptographic security feature to iMessage called PQ3. This "groundbreaking" and "state-of-the-art" protocol provides "extensive defenses against even highly sophisticated quantum attacks," according to Apple. Let's break down what that means. Apple's iMessage service already supports end-to-end encryption, but security...
iPhone Notch

Apple Explored These Notch and Dynamic Island Designs for iPhones

Friday February 23, 2024 2:05 pm PST by
With the iPhone 14 Pro models in 2022, Apple introduced the Dynamic Island, which can morph and expand to display system alerts, sports scores, and a variety of other information. The feature makes the space surrounding the front camera and Face ID sensors useful compared to the notch on older iPhone models. Apple explored a variety of ideas for the iPhone's notch area over the years before...
New Macs iPads iOS 17 4

What to Expect at Potential Apple Event in March: iPads, Macs, and More

Friday February 23, 2024 8:35 am PST by
Apple often holds its first media event of the year in March, so the company could be just weeks away from announcing new products. Below, we have outlined what to expect from a potential Apple Event this March. Past Apple Events in March Apple has held five events in March since 2015:Monday, March 9, 2015 Monday, March 21, 2016 Tuesday, March 27, 2018 Monday, March 25, 2019 Tuesday,...
iOS 17

iOS 17.4 Coming Soon With These New Features for Your iPhone

Monday February 26, 2024 6:08 am PST by
In a press release last month, Apple confirmed that iOS 17.4 will be released in March, and the update includes several new features and changes for the iPhone. Key new features in iOS 17.4 include major App Store changes in the EU, Apple Podcasts transcripts, and an iMessage security upgrade. The update also adds new emoji and includes preparations for the launch of next-generation CarPlay...
applearcade

Game Developers Describe 'Smell of Death' Around Apple Arcade

Monday February 26, 2024 7:24 am PST by
Some game developers are dissatisfied with Apple Arcade amid concerns about the subscription service's future, a new report claims. Sources speaking to mobilegamer.biz described a "smell of death" around Apple's games subscription service and noted the difference between the company's investment in TV and music, and its interest in games. "At the very top of the company there needs to be a ...