iTunes dominates US music retail, Amazon fails to dent share

9to5 Staff | Dec 17 2010 - 3:35 am PT

The figures are in and they confirm that iTunes remains the biggest US digital music retailer, with Amazon failing to grab too much of Apple’s digital music heartland.

NPD tells us AAPL’s iTunes took 66.2% of the digital music market in the third quarter of this year – that’s up from 63.2% in Q3 2009. Easy still beats free.

Amazon’s share also rose — from 11% to 13.3%. That’s good news in some ways, but in reality means that steep discounts and the company’s readiness to actually pay a financial penalty for offering albums at discounts (like, $3.99) isn’t working, at least, not in the sense of denting iTunes’ market share.

Amazon pays the full wholesale price on those subsidized albums to labels, after all.

“Distribution executives at record labels say the disparity between the two may be even steeper, with Amazon commanding just 6% to 10% of the market in any given week, and Apple closer to 90%,” says the Wall Street Journal.

It really is the continuation of a trend. In 2008, Apple overtook Walmart to take the No. 1 slot among US music retailers. iTunes accounted for over a quarter of all US music sales last year.

Meanwhile, record label bosses are said to be increasingly unhappy at iTunes in its hold on music sales. This may account for seeming reticence on their part to sign-up for the cloud-based music services fans are demanding these days. Progress for iTunes, Google and Spotify for offering such services in the US have all been impacted by the usual label foot-dragging.