iTunes Loses Marketshare But Maintains Lead

Apple iTunes is still the number one digital music sales platform in the United States, but that marketshare is slipping, according to a new report from the NPD Group.

While Apple holds a 63 percent marketshare with its iTunes platform, the company’s market holding is down from 66 percent in 2010.

Part of Apple’s slipping market is courtesy of Amazon. The e-commerce company’s MP3 store has increased from a 13 percent stake in 2010 to a 22 percent market share in 2013.

According to the report, the number of people who have bought at least one song in the last three years has remained steady at 44 million people. That means Apple and Amazon are competing for a static number of music buyers. Essentially, Amazon and Apple must convince users why their service is better.

Amazon to grab market share has in many cases been offering free physical CDs and other freebies to customers. Essentially, customers can download music tracks for their own use and then give away physical CDs to their friends.

Apple’s slipping iTunes market share could be a big part of why the company is shifting towards the much rumored iRadio platform.

The public is believed to be de-emphasizing music ownership. Only 38 percent of NPD’s survey group now says it’s important to own music, which may signal a growing dependence on streaming services such as Pandora, Spotify, Slacker, and Last.fm. NPD does note, however, that streaming appears to be encouraging some sales; of the people using such services, 41 percent say they’ve bought music they discovered that way.