Market research company The NPD Group says that Apple continues to dominate the scene for paid digital music downloads, as well as for all music purchases in the U.S. In the second quarter (Q2) of 2012, iTunes boasted a 64 percent share of the digital music market and a 29 percent share of all music sold at retail, which includes both digital and physical formats. Based on NPD's research, Amazon's MP3 store was a distant second to iTunes, with a 16 percent share of the digital market. Google Play, eMusic, Zune Music Pass, and others each had a share of 5 percent or lower. The company also forecasts that the digital music market will grow by approximately 10 percent in 2012.
"Despite increased usage of streaming radio and on-demand services, the market for digital ownership is still growing as the market evolves from the desktop to the pocket, and Apple remains well positioned as the market leader," said RussCrupnick, SVP of industry analysis for The NPD Group. "Growing consumer awareness of Google Play was aided by the expanding footprint of the Android mobile platform and represents the first step toward customer adoption. With continued Apple strength and strong entries by other emerging players, Zune Music Pass, Rhapsody, and other legacy services have seen awareness fall."
Meanwhile, online radio and on-demand services remain the fastest growing form of music consumption in the U.S. Consumer awareness of Pandora's free ad-supported radio service represented half of all Internet users in Q2, while one-third were also aware of the company's paid subscription service, Pandora One. Clear Channel's iHeartRadio service followed with 25 percent awareness and Spotify's consumer awareness reached 19 percent, which is double the level observed since its launch in 2011. Half of the respondents who were aware of Pandora actually used the service during second quarter; only a quarter of web users who recognized iHeartRadio or Spotify also used these services.
"Pandora deserves credit for becoming the premier application beginning with the iPhone in 2008, and expanding to the new generation of devices," added Crupnick. "While mobile ubiquity helps increase consumer awareness, the strong usage levels reflect an excellent listener experience, as well."