labels: E-business, Entertainment, Wal-Mart
Apple's iTunes surpasses Wal-Mart as biggest US music seller news
21 June 2008

It's the season of records in downloading. After Mozilla Firefox entered the record books with an unprecedented 8 million downloads of its third version in just 24 hours (See: Internet Explorer rival Firefox 3.0 creates download record, but reveals flaws), comes the news that technology major Apple's signature iTunes store has just sold its five billionth song, again via Internet download.

Moreover, Apple has another reason to rejoice. Its iTunes Music Store has now officially surpassed retail giant Wal-Mart as the biggest music seller in the US, a major milestone, considering, as one analyst put it, ''it is the first instance of an electronic venue surpassing a [bricks-and-mortar] retail venue for any kind of media delivery.''

US consumers still buy more CDs than digital downloads, but the gulf is narrowing rapidly. Only five years after launching its iTunes digital store on 28 April 2003, Apple has dominated the fast-growing download market so completely that it jumped ahead of individual CD sellers such as Wal-Mart, Best Buy and Target.

The pace of downloads has exponentially increased in the recent past. While it took Apple nearly three years to sell its first billion songs (23 February 2006), 10 months to sell two billion (6 January 2007), and seven months each for the third and fourth billionth downloads (31 July 2007 and 27 February 2008), the last billion were purchased within three and a half months only (19 June 2008).

In other words, Apple, over the last two years, has sold an average of 4.7 million songs per day, or an amazing 54 songs per second. Since it charges 99 cents per download, this translates into a cool $5 billion, well almost.

Coming at a time when music piracy and illegal downloading was rampant, iTunes proved the viability of the online model and showed that people were willing to pay for music, provided the charges were not exorbitant. Of course, matters were helped by its extensive repertoire and the fact that it allowed people to buy individual songs without needing to purchase the entire album.

This marks a transition from traditional media to online digital content, and Apple seems to be at the forefront of this change. And this is not reflected on the music industry alone, although it seems to have been rocked by the digital transition much harder than TV, movies and other entertainment media.

As for other affected industries, many bookstores have shut down after failing to compete with online stores like Amazon, newspapers are devoting more resources to online editions while shedding staff, TV networks are making more of their shows available online to reach people at their computers and prevent advertisers from abandoning them for other forms of online entertainment, and video game companies and other software makers are selling more of their products as downloads rather than CDs.

Apple doesn't disclose financial results for iTunes. But in the first fiscal quarter ended 29 December it reported $808 million in revenue for a category that includes iTunes store sales, a 27 per cent jump from the same quarter the previous year.

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Apple's iTunes surpasses Wal-Mart as biggest US music seller