The NPD Group has just released its quarterly report on the state of music sales, and unsurprisingly it says that Apple's iTunes store is dominating with 63 percent of digital music sales. Amazon came in second with 22 percent of all downloads by total volume, but even that number belies iTunes' reach, as eight of ten digital music buyers use iTunes for their purchases. However, NPD's numbers also contain some surprising, and perhaps sobering, results: only 44 million Americans purchased digital music at all in 2012. Digital music sales are also relatively flat over the past three years, increasing only six percent per buyer year-over-year.
"Streamers are much more likely than the average consumer to buy music downloads."
While NPD says that "store, digital music downloads have become the dominant revenue source for the recorded music industry," at least some labels still claim that the majority of their revenue still comes from CD sales. Whatever the reason for the slow growth, it does seem real and it's in that context that Apple's impending streaming radio service is important. It's theoretically possible that a streaming service could actually juice sales, as GigaOm points out the report notes that Pandora users often buy music based on their internet radio listening. It's probably a step too far to say that Apple needs iRadio to juice music sales, but Apple does need to keep up with whatever direction the music industry takes. CDs are rapidly disappearing, and there's no guarantee that purchasing digital music won't do the same as services like Spotify and Rdio gain traction.