Apple passes Walmart in music sales

by alec on April 3, 2008

Ars Technica is reporting that Apple is now the number 1 music retailer in the US, having surpassed Walmart.  No surprise, there!  iTunes is a good service.  Ars portrays this as a problem for the music industry saying:

For the music industry, there is a dark side to Apple's ascension to the top of the charts. Buying patterns for digital downloads are different, as customers are far more likely to cherry pick a favorite track or two from an album than purchase the whole thing. In contrast, brick-and-mortar sales are predominantly high-margin CDs.

What about the inventory savings, though?  Walmart only stocks the top 1,000 or so titles in stores, and sells those at a deep discount at that.  What about the millions of other CDs I might want to choose from?  If I want to buy, for example, Greg Brown's Poet Game my only real choice is to go to Amazon.  Who's holding the inventory of CD's that have been pressed so that Amazon has these for sale?  What's the cost of maintaining that inventory?

The real story here is the transformation of the music industry from a short tail phenomenon to a long tail phenomenen. The benefits to consumers are enormous! 

Digital music sales are not all "cloud".  There's a silver lining for those who care to look for it.   Just don't start by talking to an RIAA exec.

{ 1 comment… read it below or add one }

Matthew Voucher Hunt April 22, 2009 at 12:50 am

My mum just asked me what Amazon is.. I mean.. seriously!

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