Digital Home Thoughts: iTunes Outsells Brick and Mortar Stores

"Research firm NPD Group said Monday that Apple's iTunes Music Store broke into the top ten list of music retailers, marking the first time a digital music store has done so. With the iPod still selling briskly and the holiday season now upon us, it is likely that Apple will increase its share of music sales even further and possibly rise higher in the rankings next quarter. "The ongoing and growing popularity of Apple's iTunes Music Store now positions the company as a leading music retailer, and continues to legitimize legal digital music retailing," NPD music and movie industry analyst Russ Crupnick said."



The music industry has a serious public relations problem. First, they claim that iTunes (and other forms of legal music downloading) amount to a tiny fraction of all music sold. Then they claim they aren't making enough money off of music downloads. Both have turned out to be bold-faced lies. Record Companies make more money off of iTunes downloads than compact discs (as we've shown in a profit analysis on this very site), and iTunes sells more music than almost every brick and mortar store. Existing record companies need to embrace this new medium and adapt their business model to it, or they'll have to watch as new competitors sweep in and take the revenue and profits right out from under them.