Apple Is Now the #1 US Music Retailer

Quantrell writes "A leaked e-mail shows that Apple hit the #1 spot for music sales in January. The article speculates that consumers cashing in their holiday gift cards may have played a role; but of course Wal-Mart and the other retailers sold gift cards too. The news is a mixed bag for the record labels. 'For the music industry, there is a dark side to Apple's ascension to the top of the charts. Buying patterns for digital downloads are different, as customers are far more likely to cherry pick a favorite track or two from an album than purchase the whole thing. In contrast, brick-and-mortar sales are predominantly high-margin CDs.'" We recently discussed Wal-Mart's role in the music business, back when they were selling nearly 20% of US music. For January Apple was at 19% and Wal-Mart at 15%.

Comments

Article is wrong .. M

[quo_vadis]

As of Feb 26 2008 iTunes is the #2 retailer in the US. http://www.apple.com/pr/library/2008/02/26itunes.html

What the article is talking about is a 1 week period in January (most likely caused by all the people using their Christmas gifts of iTunes gift cards) where the store sold more music. Overall though, it still remains number two.

Re:So what?

[UnknowingFool]

Right now, the artist still gets the RIAA shaft from Apple the same as they do any other music store money wise.

Actually, artists got it worse. Theoretically artists should have benefited financially from digital downloads but the opposite is occurring thanks to the labels. Apple takes their $0.29 from every $0.99 track to pay for the hosting, distribution, credit card fees, etc. The remaining $0.70 goes to the label to take their cuts before passing the royalties to the artists. However, the labels are taking their cuts as if the sale was a physical medium and are still charging the artists for manufacturing and distribution costs. Manufacturing costs no longer apply, and Apple handles the distribution. But I'm sure somewhere in the fine print of the record deal that allows the label to charge for whatever they want.

Has Apple even been able to break the RIAA, "our way or the highway" rule and sell both RIAA music and independent music?

I'm not sure the amount of independent artists that Apple has but a few years ago they signed some major indie labels.

Re:Hopfully

[AaxelB]

Sure, you can vote for Amazon, but that would just be throwing your vote away. How on earth is it throwing your vote away? It's not a winner-take-all system, you get exactly what you vote for. I vote for DRM-free music from Amazon, a company that I like and has almost never significantly pissed me off. And you know what? I get that DRM-free music from Amazon. It would be like voting third-party if you could only play the music on certain, doomed-to-fail devices, but, once again, it's DRM-free. Apple and Walmart are indeed the two big players, but Amazon is only like a third-party in that they're less well-known (as a digital music retailer).