James Delahunty
17 Dec 2010 23:40
Apple's iTunes Music Store has increased its share of the digital music market to over 66 percent despite increasing competition from Amazon and others.
The NPD Group issued figures on the digital music market based on music sales this year. It puts Apple's iTunes music store clearly at the very top again. Its share of the market jumped from 63.2 percent to 66.2 percent. Rival Amazon witnessed a growth in its market share from 11 percent to 13.3 percent.
Amazon has attempted to lure customers away from iTunes by offering "daily deals" where albums are sold for as little as $3.99. In order to offer such a price cut, Amazon needs to take a loss on the sales, reportedly paying the wholesale price of the album despite the discount to customers.
Record label executives hinted to the Wall Street Journal that the situation may be worse for Amazon, since it often only maintains between 6 percent and 10 percent of the market on any given week, while iTunes approaches 90 percent on a regular basis.
Amazon has also sold at a loss to maintain an edge in the e-book market. Reported suggest that Amazon can make a loss of up to $4.50 on the sale of certain e-book titles in order to maintain its dominant position in the market.