Apple Maintains Digital Music Dominance, But Amazon Making Significant Gains

NPD has released its most recent report examining digital music downloads in the United States.

The research firm reports that Apple continues to hold a 63% share of the market down from 66% in 2010, with Amazon at 22%, up from 13% 3 years ago. Some 44 million Americans bought at least one song last year, with NPD saying that number has remained stable over the past three years.

“Since the launch of Apple’s iTunes store, digital music downloads have become the dominant revenue source for the recorded music industry and iTunes continues to be the dominant retailer,” said Russ Crupnick, senior vice president of industry analysis at NPD. “There’s a belief that consumers don’t need to buy music because of streaming options, when in fact streamers are much more likely than the average consumer to buy music downloads.”

However, only 38 percent of consumers said it was important to own music, while 41 percent of users of streaming music services like Pandora or Spotify said they had purchased music they discovered on such a service.

The relatively low number of consumers who find it important to own music may be part of the impetus to Apple's development of an 'iRadio' streaming music service. Apple is rumored to be pushing hard for a Summer 2013 launch.