Amazon music store gains not really denting iTunes

By on April 16, 2008, 2:59 AM
Ever since Amazon launched its MP3 download service last September, the online retailer has seen its store grow on a few key principles: it sells a-la-carte music tracks cheaper (89 cents) than iTunes, all songs are DRM-free (meaning they are playable on iPods and pretty much every other MP3 player on the market), and the store is relatively easy to use.

It turns out, though, that Amazon’s growth has not come at the expense of the iTunes Store, according to a new report by the NPD Group. Only 10 percent of all purchasers at Amazon MP3 are converts from Apple's service, with the rest either switching from other stores or else are new to buying music online. This is seen as a “healthy indication that the digital music customer pool can expand into new consumer groups” and that other stores don’t necessarily have to draw customers away from iTunes to grow.

That said, the research firm noted that Apple’s music sales are still 10 times those of Amazon’s, so it will probably have to snatch away customers from Apple eventually if it wants to compete for number one.




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