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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%.
The only reason apple don't offer all their music without DRM is because the record companies won't let them. They are allowing amazon to have DRM free music in order to try and reduce apple's marketshare and thus reduce apple's chips at the negotiation table with the record companies.
You should be thankful for Apple and the fact that they are #1. It's because of Apple that the labels have allowed Amazon to sell MP3's without any kind of DRM whatsoever. If Apple had never gotten such a stranglehold on the digital marketplace, most of the labels would have never allowed Amazon to sell DRM free music. I'm glad that Apple is where it is and I hope that people continue to buy music from them. I won't be among them but as long as Apple keeps doing what it's doing, the labels will allow Amazon and others to sell music without DRM as a counterweight and smart consumers will be able to purchase legit, DRM free music.