itunes number one Over the last year or so, we have watched as Apple’s iTunes has become an ever increasing influence in the music industry. It was just last June (2007) when they passed Amazon and took over the #3 position as largest music retailer in the United States. In February (2008), Apple announced that they had become the #2 music retailer and surpassed Best Buy which was another huge milestone for them (this was likely data from December that they were reporting on). Standing in their way of first place up until now has been discount department store Wal-Mart. News today is that for the first time ever, iTunes has passed Wal-Mart and they are now the number one retailer of music in the United States according to the NPD Music Watch Survey conducted by the NPD Group.

Ars Technica was the first to report on this saying that they received documents that had come from Apple. Apparently certain Apple employees received an email memo with charts showing their first place position, and one of them passed them on to Ars. The charts show that this data is for the month of January, and so clearly sales of gift cards around the holidays really helped them out. According to the latest survey, the stats are as follows:

  1. iTunes – 19%
  2. Wal-Mart (in-store and online sales) – 15%
  3. Best Buy – 13%
  4. Amazon – 6%

Other stores that make up the whole include Borders, Target, Circuit City, Barnes & Nobles, and a few others.

One thing that’s really going to help out Apple is that more and more people are learning about digital downloads and actually starting to use them. Physical sales of music are continuing to decrease while digital downloads are increasing. There are multiple music download sites out there, but iTunes remains one of, if not the most well-known site out there. Apple’s takeover of first place also means that the sales of full CDs will probably continue to decrease.  When people walk into a retail store to purchase their music, they really have no choice but to buy the whole CD.  When they purchase online, they can pick which songs they really want and most of the time, people don’t bother to get the whole album.

Now we’re just wondering if they will be able to hold on to the first place position in the months to come, or if it was the sales of thousands upon thousands of iTunes gift cards that helped push them into the #1 position.