Apple (II) Records

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Reuters reports that Apple is now the U.S.’s third largest music retailer, with 10% market share (behind only Wal-Mart and Best Buy).

NPD said the iTunes digital music store had benefited from sales of Apple’s iPod digital music player during the holiday season. The vast majority of digital songs and albums bought on iTunes will only play on iPods, as well as the iTunes PC application.

Yes, the iPod drives Apples retail music market, but iTunes downloads offer significant advantages over retail shopping :

Selection

Though Wal-Mart is the top U.S. music retailer, it carries a relatively narrow selection of CDs. Some analysts believe its rivals are likely to consider a similar strategy.

Why should these companies stock up on inventory on artists whose popularity they can’t predict? iTunes requires only that the artist offer their music. No physical inventory, fewer middleman, and less reliance upon retail gatekeepers.

Every Song is a Single

Selling songs individually as if each were a single: Are you likelier to download a single song from an unknown artist than get the entire album.?There is a always surplus of material to listen to. I’d rather start with a smaller chunk and make a smaller investment.

Popular artists with new releases will still have multiple songs that chart, but the burden of that falls on the artist to actually scrape together a few good songs every few years. Unless your are an entrenched industry star with a vested interest, how can this be bad?

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