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iTunes Boasts Second Place For Music Sales, Hits Milestones

Legal music downloads now account for 10% of the music acquired in the United States, according to analysts with NPD Group.
Wal-Mart and iTunes are the most popular music retailers in the United States, according to a study released Tuesday.

Market research firm NPD Group reported the rankings in its annual MusicWatch survey. The rankings are based on music sold last year.

Legal music downloads now account for 10% of the music acquired in the United States, NPD said.

However, the industry analyst group noted, "a sharp increase in legal digital download revenues could not offset declines in CD sales, which resulted in a net 10% decline in music spending (from $44 to $40 per capita among Internet users)."

As a result, NPD Group said the overall portion of music acquisition that consumers actually paid for fell to 42% in 2007 from 48% in 2006.

Apple on Tuesday also announced its own milestone in its music offerings and sales.

The iTunes Store now has more than 50 million customers, boasts a catalog of more than 6 million songs, and has sold more than 4 billion songs. Apple said it sold 20 million songs on Christmas Day 2007. In addition to music, Apple also said it's expanding its footing in the video market.

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

Apple recently announced that it's expanding offerings from Hollywood studios. Last month, the company launched iTunes Movie Rentals, with video from 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer, Lionsgate, and New Line Cinema.

iTunes Movie Rentals plans to sell more than 1,000 titles by the end of this month, with about10% in high-definition video with 5.1 Dolby Digital surround sound. Users can rent the movies directly to wide-screen television sets through Apple TV and view the movies on iPod classics, iPod Nanos with video, and iPod Touch.

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Jessica Davis, Senior Editor