Amazon expands digital music sales without taking it away from iTunes
Much of Amazon’s success in the digital music business has come through customers who have never tried Apple Inc.’s iTunes Store, a sign of potential growth in the music download business.
NPD, one of the leading market research firms, said in a report Tuesday that only 10 percent of Amazon MP3 customers surveyed in February indicated they had previously purchased music through iTunes.
“The fact that Amazon’s early growth doesn’t seem to be coming at the expense of iTunes is a healthy sign that the digital music customer pool can expand to new consumer groups that haven’t yet joined the iTunes community,” analyst Russ Crupnick remarked.
Despite only launching six months ago, Amazon MP3 recently overtook Wal-mart to become the second-largest provider of on-demand music downloads in the United States, behind iTunes.
Among the service’s pluses are royalty-free songs from all major record labels, superior encoding on digital files, and a price per download that’s often less than iTunes.
Early surveys by the research firm revealed that 64 percent of Amazon MP3 customers were men, compared to 44 percent for iTunes. Amazon MP3 showed the most strength among young adults ages 18 to 25, but only 3 percent of its customers were ages 13 to 17.
In contrast, the iTunes Music store has sold nearly a fifth (18%) of its music to teens and also has a sizeable teen gift card franchise, while Amazon has a relatively small base of teen CD buyers.