According to a recent NPD “Annual Music Study 2012,” Apple Inc’s iTunes store, which turns 10 years old on April 28, was still dominant with 63 per cent of the market in the fourth quarter of 2012. This is followed by AmazonMP3 that accounted for 22 per cent of the market for music downloads in the United States in Q4 2012.
The research found that Amazon.com Inc has grabbed more than a fifth of the market for digital music downloads, helped by the launch of its own tablet computers and aggressive pricing.
“Amazon’s entry into tablets probably helped,” said Russ Crupnick, senior vice president, industry analysis, at NPD Group. Amazon launched its own tablet, the Kindle Fire, in 2011, and last year the company rolled out larger versions of the device to compete more with Apple’s iPad.
According to the report, 44 million Americans bought at least one song track or album download last year. That number has remained relatively stable over the past three years, despite the rapid growth of Pandora and other music-streaming options. NPD estimates that average per-buyer spending on music downloads increased 6 percent, year over year, due largely to increases in music purchasing by teens, along with an increase in the number of consumers purchasing both single song tracks and full albums.
Russ Crupnick, senior vice president of industry analysis at NPD said,”Since the launch of Apple’s iTunes store, digital music downloads have become the dominant revenue source for the recorded music industry and iTunes continues to be the dominant retailer.There’s a belief that consumers don’t need to buy music because of streaming options, when in fact streamers are much more likely than the average consumer to buy music downloads.”
Around 38 percent of the respondents, said that it is still important to own music, and 30 percent believed that listening to albums is important. Among consumers who listened to music on Pandora and other free music-streaming services, 41 percent reported that owning music was important to them; in fact, many free streamers attributed buying more downloads to their discovery on a radio or via an on-demand service.