Welcome to “Jobs?Mart”
If the recording industry thinks Steve Jobs has been a bear to negotiate with in the past, wait until it gets a load of him now.
Apple’s (AAPL) iTunes Store has become the No. 2 music retailer in the states, according to a new study by the NPD Group. It’s second only to Wal-Mart and, if things keep going the way they are, Apple will soon surpass it. “Digital sales were up close to 50% and CD sales were down 20% last year,” said Russ Crupnick, the NPD Group’s president of music. “Even at half that growth rate in digital sales, Apple will in all likelihood catch Wal-Mart this year.”
One last point worth noting here: While 1 million consumers dropped out of the CD-buyer market in 2007, 29 million acquired digital music legally. That’s an increase of 5 million over the previous year. Growth here was largely driven by the 36-to-50 age group. “The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer,” said Crupnick. “With so many baby boomers and Gen Xers entering the market, there are certainly opportunities to sell more digital albums, promote older catalog titles, or create bundles that will raise revenues. In the near term that’s going to be the best means available to narrow the gap on dwindling CD revenues.”