NPD Group released a report Tuesday that said iTunes had a 64% share of U.S. digital download sales and a 29% share of overall sales in the second quarter. The figures came from NPD's consumer panel data of more than two million consumers that tracks everything from music purchases to awareness of specific digital music services.
But the numbers don't pass the sniff test. To people familiar with Nielsen SoundScan numbers, the standard measure of digital and physical sales in the U.S., the numbers seem quite low. The difference most likely stems from the different ways the companies collect data. While NPD uses a survey method, Nielsen SoundScan collects sales data from retailers.
One major label source said iTunes' share of his company's total market share was in the low 40 percents in the second quarter. The second quarter is a relatively strong time for digital sales because the release schedule is slow. Brick-and-mortar retailers lag behind in market share for much of the year, but end the year strong because of holiday-related CD sales.
An estimate in the low-40s sounds about right -- if not conservative -- for that time of the year. iTunes had a 38.23% overall market share in 2011 and a 33% overall share in 2010, according to Billboard's calculations. With CD sales down again this year and no major threats from its peers, Apple is likely to increase its share of the download market this year, too.
iTunes' 38.23% share of the overall market in 2011 corresponded to a 76% share of the digital download market (converting tracks into albums at 10 tracks per album). That may seem high, but it can go higher. One independent label group I spoke with said iTunes accounted for 88% of its digital revenue in the second quarter -- not just its download revenue, all of its digital revenue! Of course, market shares vary by label, distributor and artist.
NPD put Amazon's digital download market share at 16% and estimates Google Play, eMusic and Zune Music Pass each have less than a 5% share. While a single-digit market share may not be impressive, it is certainly expected. Amazon has taken years to get its modest, second-place market share.
There's more Google Play news in the report. Whether it's good or bad is open for interpretation. NPD's consumer panel found that one in five online consumers is aware of Google Play's music store. That may be good news if you're think Google Music has made inroads since its launch in November 2011. But that could easily be considered bad news, too. Google's download store is part of Google Play, the web and mobile store seen by tens of millions of online consumers.
Google Play is to the Android operating system what iTunes is to Apple's iOS operating system. And Android is in a lot of peoples' hands -- 500 million worldwide activations and 1.3 million new activations a day, Google executives have said this month. ComScore put Android's share of the U.S. smartphone market in July at 52.2%, or 59.5 million people. With nearly 60 million Americans using Android devices, there isn't much overlap between Android users, the people who are aware of Google Music and the people actually buying music at Google Music.