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Amazon nabs bigger share of music downloads (poll)

iTunes still dominates the music download arena, but Amazon is coming on, and other competitors are in the wings.

Apple doesn’t report earnings until next week, but analysts aren’t expecting much of an announcement. The company is under pressure from competitors like Samsung, which starts shipping its new Galaxy S4 smartphone later this month. Apple hasn’t introduced a groundbreaking gadget in a long time.

Even Apple's music business is taking a hit -- from Amazon. The online retail giant snapped up 22 percent of the music download market in the last quarter of last year, according to the NPD Group’s annual music study.

“Amazon has for years had a great CD business,” says NPD Senior Vice President Russ Crupnick. As those same customers have adopted digital downloads, he says, “often times their loyalty to Amazon has stuck.” Loyalty to Apple is slipping. iTunes’ share fell to 63 percent, from 68 percent the year before.

Meanwhile, both Apple and Amazon have to worry about guys like Fletcher Price.

“I would say 99 percent of my music comes from Pandora One,” says the 24-year-old business analyst from Indianapolis, Ind.

Price pays $36 a year to stream music -- without actually owning any of it -- on Pandora. Or he borrows his fiancée’s Spotify account. That streaming service announced plans this week to expand into Asia and Latin America.

Still, Price says, sometimes you just have to own a song. His latest download:  “Gangnam Style” on iTunes. "Just because it was a fantastic song," he says.

NPD’s Crupnick says music streaming won’t dominate the music business any time soon.

“Consumers still want a variety of ways to engage with music,” he says.

Including some pretty low-tech ones. Crupnick says sales of physical, hold-in-your-hand CDs to teenagers were up about 20 percent last year.

 


Correction: An earlier version of this article misstated the rate for Pandora One. The music service costs $36 per year. The text has been corrected.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.
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Amazon did something very nice for me about a year ago.

I have had an Amazon account going back at least as far as 1999 and over the years bought a few music CDs. When I bought into Amazon Prime ($79 per year) I got cloud storage for my digital purchases.

Then about a year ago Amazon auto-ripped to my cloud ALL the CDs that I had purchased from Amazon going back to 1999, atleast those for which digital downloads are now available. Suddenly I had an additional 400 tracks available to me. In at least one case a CD that I bought and then gave away as a Christmas present showed up as an auto rip in my cloud. Bonus!

Now some of my musical tastes are out there on the fringes, so not every single song that was on every single CD I ever bought made it to the cloud. But I can listen to Kenny Ball play "Midnight in Moscow", even if I am not sure where the CD I originally bought in 1999 is today.

I thought this was a nice gesture, and certainly more than I expected when I bought into Prime.

i love to engage in music,, that is why im looking for a ways that are not too costly for me

If I really like a composer or artist, I will buy their physical disk. I like having a hard copy backup, because drives can fail. But finding them to buy is becoming harder and harder. Record stores are almost extinct in the wild, and places like Best Buy and B&N have fewer CDs every time I visit. I am forced to go to Amazon (which I don't mind, because they now create a digital copy of the music in the cloud for me).

I try to buy my music directly from the artist if I can. That way I know that they are getting their fair share of money. I also love SiriusXM and NPR Music, who introduce me to many artists.

Amy, it is $36. a year for Pandora. You had best correct - - big difference!

Don't forget emusic! It's sort of the Costco or Sam's Club of digital music. A membership gets you songs for about 20-50 cents less than what you'd pay at iTunes or Amazon. It's a no-brainer if you spend an average of $15 to $20 a month on mp3s anyways. I also pay for Spotify and Pandora, buy occasional mp3s on Amazon, Bandcamp and iTunes, and pick up vinyl at local record stores (Electric Fetus and Treehouse Records in Minneapolis!).

$36 a month for Pandora!? I pay $36 a year for ad less, endless music. And I farm my log in out to all my family members which gives me a variety of new stations and songs to listen to. Are you sure it was $36 a month?

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