iTunes Still Top Music Retailer

The NPD Group says iTunes is still the top U.S. music retailer, but Amazon is showing strength, in part due to its DRM-free MP3 Store.

Market research firm NPD Group has released new numbers for music retailing during the first half of 2008, and finds that Apple’s iTunes store still leads the pack amongst music retailers, based on purchases of CDs and counting every 12 individual tracks sold online as equivalent to an album. Brick-and-mortar retailers Wal-mart and Best Buy came in second and third, respectively, with Amazon and Target taking the fourth and fifth positions.

Apple took over the top slot in U.S. music retailer earlier this year, displacing Wal-mart, and NPD’s latest market figures continue to show consumers embracing digital music sales. The possible spoiler in NPD’s latest numbers might be Amazon: the online retailer shifted from fifth place to fourth place overall, partly because its online sales of traditional music CDs haven’t fallen off as badly as sales of traditional CDs in brick-and-mortar outlets, and Amazon’s DRM-free MP3 store is helping the company leverage its way into the online music market.

“We expect Apple will consolidate its lead in the retail music market, as CD sales continue to slow,” said NPD entertainment industry analyst Russ Crupnick, in a statement. “Amazon’s CD buyers tend to be older, so they haven’t abandoned the CD format to the extent seen in the average music buyer.”

Of the top five music retailers, Amazon is the only one with a firm presence in both the traditional CD and digital download marketplace. (Which is not to say Wal-mart and Best Buy haven’t tried to get into the digital music business—they just haven’t been successful.