Despite increased usage of streaming radio and on-demand services, the market for digital ownership is still growing as the market evolves from the desktop to the pocket, and Apple remains well positioned as the market leader
Port Washington, N.Y. (PRWEB) September 18, 2012
According to The NPD Group, a leading market research company, nearly a decade after introducing Americans to the original iTunes Music Store, Apple continues to dominate the scene for paid digital-music downloads and for all music purchases in the U.S. In the second quarter (Q2) of 2012, iTunes boasted a 64 percent share of the digital music market and 29 percent share of all music sold at retail, which includes both digital and physical formats. NPD expects the digital music market to grow by approximately 10 percent, on a unit basis, in 2012.
Based on information from NPD’s “MusicWatch” and “Music Acquisition Monitor” tracking services, which have provided consumer research on the music industry since 2001, Amazon’s MP3 store was a distant second to iTunes, with a 16 percent share of the digital market. Google Play, eMusic, Zune Music Pass, and others each had a share of 5 percent or lower. Consumer awareness of Google Play is growing, although it is much lower than for Amazon and iTunes. One out of five Internet users was aware of Google’s music service in Q2, which is an improvement aided by the integration of Google Music with Google’s Android Market and ebookstore.
“Despite increased usage of streaming radio and on-demand services, the market for digital ownership is still growing as the market evolves from the desktop to the pocket, and Apple remains well positioned as the market leader," said Russ Crupnick, senior vice president of industry analysis for The NPD Group. "Growing consumer awareness of Google Play was aided by the expanding footprint of the Android mobile platform and represents the first step toward customer adoption. With continued Apple strength and strong entries by other emerging players, Zune Music Pass, Rhapsody, and other legacy services have seen awareness fall."
Looking at the overall music retail market, which includes CDs and paid digital-music downloads, Apple also led all music retailers in Q2 (29 percent), followed closely by Amazon/AmazonMP3 (19 percent), and Walmart (11 percent). Please note that when comparing digital downloads to CD albums, NPD relies on an equivalency, in which single albums are equivalent to 10 digital-music tracks.
Online radio and on-demand services remain the fastest growing form of music consumption in the U.S., according to NPD. Consumer awareness of Pandora’s free ad-supported radio service represented half of all Internet users in Q2, while one-third were also aware of the company’s paid subscription service, Pandora One. iHeartRadio, Clear Channel’s radio service, followed with 25 percent awareness; Spotify’s consumer awareness reached 19 percent, which is double the level observed since its launch in 2011. Half of the respondents who were aware of Pandora actually used the service during second quarter; only a quarter of web users who recognized iHeartRadio or Spotify also used these services.
“Pandora deserves credit for becoming the premier application beginning with the iPhone in 2008, and expanding to the new generation of devices,” said Crupnick. “While mobile ubiquity helps increase consumer awareness, the strong usage levels reflect an excellent listener experience, as well.”
NPD also noted that 64 percent of iTunes buyers listened to online radio, as well. “The rising popularity of online radio helps explain Apple’s rumored interest in streaming radio,” said Crupnick. “As listening migrates from downloads on laptops to streams on phones and tablets, it would make sense for iTunes to offer customers the same integrated experience they have been known for by adding a streaming capability.”
The information in this press release is based on data from NPD’s “MusicWatch” tracking service and “Music Acquisition Monitor,” based on surveys of NPD’s proprietary online consumer panel. Tracking the consumer music market since 2001, the research identifies changing consumer behavior trends. NPD’s reporting is based on an average comparison equivalency, in which single albums are equivalent to 10 digital music tracks. Digital music numbers reflect paid, permanent digital downloads only. Survey data was weighted to represent U.S. population of Internet users (age 13 and older) and tested for statistical significance at 95 percent confidence level.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 2,000 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, entertainment, fashion, food, home and office, sports, technology, toys, video games, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us Twitter at https://twitter.com/npdgroup.