Apple Second Only To Wal-Mart in Music Sales, But For How Long?

Apple just slipped out a second press release this AM bragging that, according to NPD, it is now the #2 music retailer in the US, behind the megalithic Wal-Mart.

Apple also boasts 50 million iTunes customers and over 4 billion tracks sold. It's a nice celebratory email, based on solid facts, but it hides some serious insecurities: things might not remain this rosy for long.

More and more people will soon discover Amazon's download store, with higher-res, lower-priced non-DRM MP3s, plus automatic loading into iTunes. Many iPod owners will also be drawn to Wal-Mart's own increasingly busy download department, though in our Battlemodo we decided Amazon was the better bet.

You can't get just anything DRM-free yet, and iTunes still has some sweet exclusives, but with stronger support from all four major labels, Amazon is bound to overtake iTunes by and by, and Wal-Mart may easily expand its lead.

Apple's release:

iTunes Now Number Two Music Retailer in the US

iTunes Customers Top 50 Million

CUPERTINO, California—February 26, 2008—Apple® today announced that iTunes® (www.itunes.com) is now the number two music retailer in the US, behind only Wal-Mart, based on the latest data from the NPD Group*. Apple also announced that there are now over 50 million iTunes Store customers. iTunes has sold over four billion songs, with an incredible 20 million songs sold on Christmas Day 2007 alone, and offers the world's largest music catalog of over six million songs from all of the major and thousands of independent labels.

"We'd like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone," said Eddy Cue, Apple's vice president of iTunes. "We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes."

Last month, Apple launched iTunes Movie Rentals featuring movies from all of the major movie studios including 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer (MGM), Lionsgate and New Line Cinema. Users can rent movies and watch them on their PCs or Macs, all current generation iPods**, iPhone™ and on a widescreen TV with Apple TV®. iTunes Movie Rentals will offer over 1,000 titles by the end of this month, including over 100 titles in stunning high definition video with 5.1 Dolby Digital surround sound which users can rent directly from their widescreen TV using Apple TV.

iTunes 7.6 is available as a free download at www.itunes.com. iTunes Movie Rentals are available in the US only and are $2.99 (US) for library titles and $3.99 (US) for new releases, and high definition versions are priced just one dollar more with library titles at $3.99 (US) and new releases at $4.99 (US). Movie rentals from the iTunes Store for Mac® or Windows require iTunes 7.6. iTunes Movie Rentals require a valid credit card with a billing address in the country of purchase.

*Based on data from market research firm the NPD Group's MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions. The iTunes Music Store became the second-largest music retailer in the US after Wal-Mart, based on the amount of music sold during 2007.

**Movie rentals work on iPod classic, iPod nano with video and iPod touch.