Port Washington, N.Y. – Apple (NASD: AAPL) increased its dominant share
of the digital music retail market in 2010, and now holds 66.2% market share,
up from 63.2% in the third quarter of 2009, according to market research firm
NPD Group.
Meanwhile, Amazon.com (NASD: AMZN) — Apple’s closest competitor in the space —
increased its market share from 11% to 13.3% during the same period.
Distribution execs at record labels additionally told The Wall Street Journal
that Apple’s share may be closer to 90% and Amazon’s 6%-10% in any given week.
Amazon has sought to attract consumers with steep discounts on certain albums,
offering "daily deals" where MP3 albums are discounted to $3.99.
However, in these instances Amazon is still paying $7 to $8 for each album,
eating the disparity in price as it looks to digital music as a "loss
leader" intended to spur sales of other products from its website.
Sources
tell The Journal the company is cooperating with labels on a separate
promotion, where albums are discounted to $5, as labels temporarily cut their
wholesale prices.
Related Links:
http://tinyurl.com/37xac3o
(WSJ)
