U.S. music sales: Good news, bad news for Amazon.com |
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U.S. music sales: Good news, bad news for Amazon.com
NPD Group just came out with a bunch of new data on music sales and it's a mixed picture for Amazon.com. The good news? Good old-fashioned CDs -- which Amazon sells a lot of -- made up 65 percent of music sold in the U.S. in the first half of 2009. But in the fast-growing digital music segment, Amazon's MP3 business trails Apple's iTunes by a wide margin.
Apple continued to dominate the digital music market, with 69 percent of sales in the first half of 2009, while Amazon had a modest 8 percent, according to the NPD data. While digital made up 35 percent of overall music sales, the segment has been growing at a rapid clip (up from 20 percent in 2007), and NPD analyst Russ Crupnick estimates that digital music will nearly equal CD sales by the end of 2010.
What does this mean for Amazon? The online retailer, which makes most of its revenue from physical products, has been shifting to digital delivery on multiple fronts (books, music, cloud computing). The rapid evolution of the music business from plastic-wrapped CDs to digitally delivered songs puts more pressure on Amazon to ramp up its MP3 business.
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