Apple’s iTunes Now Second Largest US Music Retailer

iTunes, Apple Inc.'s online music store has been ranked the number-two music retailer in the U.S. behind Wal-Mart Stores Inc. as measured by unit volume, according to the announcement made by market researcher NPD Group on Tuesday.

The NPD Group reports these rankings in its annual MusicWatch survey. These rankings are based on music sold last year. The survey measured unit volume based on a 12-track CD equivalency for song downloads.

According to the study, Best Buy Co Inc. came in third and Target Corp. fourth for the full year 2007.

Legal music downloads now account for 10% of the music acquired in the United States, according to the NPD data. Also, the amount of music purchased by Americans went up 6% in 2007 compared to 2006, mainly due to the surge in digital music sales which don't cost as much as CDs. Due to this fact the actual money spent on music in 2007 is 10% less compared to 2006 due to dismal CD sales which dropped from about $44 per capita to $40 among Internet users.

The NPD Group said that the overall portion of music acquisition that consumers actually paid for fell to 42% in 2007 from 48% in 2006. Also, approximately 1 million consumers did not buy CDs in 2007, and 48% of U.S. teenagers didn't buy any CDs during the year, up from 38% in the year before.

Now what has to be given due consideration is the fact that iTunes sells only digital downloads, and Wal-Mart sells CDs. As CD sales are plummeting and digital downloads are skyrocketing, so it's likely that soon, iTunes will be in the top spot.

The iTunes Store boasts of more than 50 million customers and has a catalog of more than 6 million songs having sold more than 4 billion songs. Apple said that in addition to music it's also expanding its footing in the video market.

Eddy Cue, Vice-President of iTunes said, "We'd like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone. We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes."