Apple Now Ranks 7th Among Music Retailers

Posted by: Arik Hesseldahl on November 22, 2005

After just a little more than two years of operation Apple’s iTunes Music Store has broken into the list of top ten music retailers as of the third quarter, debuting in seventh place according to retail market researcher NPD.

Last year at this time, iTunes was in 14th place, but has since vaulted ahead of Tower Records, Sam Goody and Borders. To think that a music download service sold more music than so venerable a name in the business as Tower Records is pretty surprising to me. Wal-Mart tops the list in first place, followed by Best Buy, Target, Amazon, FYE and Circuit City.

One interesting thing that catches my attention about NPD's methodology. In order to compare single-track download sales to sales of physical CDs -- or albums as they're still called in a throwback to the vinyl days -- NPD reckoned that every 12 tracks sold was the equivalent to the sale of an album. By the time of its last public statment on the subject, which was on July 18, Apple had pegged its download count at 500 million songs. My guess is that given the pace of iPod sales, by the end of the holiday season it will be closing in on 750 million if not more.

Last month NPD also noted once again, a decline in sales of CDs in favor of digital downloads, and estimated that consumers downloaded some 155 million songs from legal services like iTunes. Downloads grew at a rate of 175% while CD sales slowed by 5%. NPD also estimates that the average computer user has 340 music files on his or her computer, and that 69% of Internet-using households have at least one music file on their computer.

And most of those digital sales will be of single tracks, rather that complete albums. This makes me worry about the idea of the album itself. Sure you can argue that in most cases an album is two or three good songs padded by nine or 10 bad ones. But my most vivid and pleasant memories of listening almost always involve the full album experience. What would "Kind Of Blue" be without "Freddie Freeloader" or "Abbey Road" without "Here Comes The Sun"?

I'm just thinking there's a lot of artistic energy and planning that goes into making an album, and the best musical artists usually do it very well. I'd rather not see that kind of experience diluted by what appears to be a greater commercial emphasis on single track sales.

Update at 3:14 pm EST: Above I referred to the latest number of iTunes downloads reported by Apple at 500 million. Looks like I missed a line in the press release issued yesterday on the flash memory supply deals that placed the new number at 600 million. Sorry about that.

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