Apple’s iTunes Now 25 Pct Of U.S. Music Sales

Remember when Apple took over for Wal-mart as the top music retailer in the U.S.? iTunes keeps getting bigger: now it accounts for 25 percent of all music sold.

Almost a year and a half ago, Apple’s iTunes store took over the top spot in U.S. music retailing from Wal-mart, and the event was hailed as a bit of a milestone in the development of the digital music business. But iTunes’ growth hasn’t really stopped there: according to new sales figures from the NPD Group, Apple’s iTunes store now accounts for 25 percent of the U.S. music market. And while the audio CD remains the most popular format for music sales in the United States, digital sales are growing at a pace that should have them nearly equal to CD sales by the end of 2010.

“The growth of legal digital music downloads, and Apple’s success in holding that market, has increased iTunes’s overall strength in the retail music category,” said NPD VP of entertainment industry analysis Russ Crupnick, in a statement. “But the importance of the big box retailers shouldn’t be dismissed, as long as the majority of music consumers continue to buy CDs.”

According to NPD’s MusicWatch service, Wal-mart remains the number two music retailer in the United States, accounting for 14 percent of all music sold in the country, with Best Buy coming in third. Apple’s share of the overall market continues to grow: iTunes had 14 percent of the market in 2007, and 21 percent in 2009.

Among digital music retailers, Apple’s iTunes is dominant, accounting for 69 percent of the U.S. digital music market during the first half of 2009; in comparison, Amazon’s MP3 store accounted for 8 percent of the digital music market. Among CD retailers, Wal-Mart is still in first place, selling 20 percent of all CDs in the United States; Best Buy accounted for 16 percent of U.S. CD sales in the first half of the year, with Amazon and Target both accounting for 10 percent each.