ITunes records a sales milestone
The digital download store overtakes Wal-Mart as the biggest U.S. music seller.
SAN FRANCISCO — Apple Inc. has surpassed Wal-Mart to become America's No. 1 music store, the first time that a seller of digital downloads has ever beaten the big CD retailers.
Apple sold more albums in January and February than any other U.S. retailer, market research firm NPD Group said Thursday, underscoring how the music industry is on the front edge of a digital media shift that is upending businesses as diverse as bookstores and video game makers.
U.S. consumers still buy more CDs than digital downloads, but the gulf is narrowing rapidly. Only five years after launching its iTunes digital store, 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.
"It's a major milestone," said Tom Adams, president of consulting firm Adams Media Research. "It is the first instance of an electronic venue surpassing a [bricks-and-mortar] retail venue for any kind of media delivery."
Many industries are feeling the pain. Bookstores are shutting down, unable to compete with online sales and huge retail chains. Newspapers are laying off thousands of employees as advertisers and readers move to the Web.
Television 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. Video game companies and other software makers are selling more of their products as downloads rather than CDs.
But the music industry has been rocked by the digital transition much harder than TV, movies and other entertainment media. CD burners made it possible for anyone to create playlists of favorite songs, hastening the shift from albums to singles. Songs could be downloaded faster than movies or TV shows, both legally and illegally. And devices such as Apple's iPod made songs easy to listen to anywhere.
"We are thrilled," Eddy Cue, Apple's vice president of iTunes, said in a statement.
NPD Group, based in Port Washington, N.Y., did not release figures on how many albums each company sold. It said it counted every 12 singles sold as one album, and that Apple probably received a boost during the two months by people cashing in iTunes gift cards -- which Wal-Mart and other retailers also sell -- received during the holiday season.
But NPD Group analyst Russ Crupnick predicted that Apple's music industry power would only continue.
