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Good news for Apple, bad news for music labels

That observation is proving axiomatic yet again as news emerges that Apple’s iTunes has now leap-frogged Wal-Mart to become the No 1 music retailer in the United States, which is the No 1 music market in the world. According to Ars Technica, Apple has 19 per cent of the music retail market compared to Wal-Mart’s 15 per cent. A year ago, iTunes surpassed Amazon for the first time. Now, Amazon is in fourth, Ars says, citing statistics from industry sales tracker NPD Group.

While the report suggests download sales are still surging (at least for Apple), it does point to yet again worrisome news for the labels. NPD Group had been tracking the precipitous decline in physical music sales for some time. In February, it estimated that “one million consumers dropped out of the CD buyer market in 2007, a flight led by younger consumers. In fact, 48 percent of US teens did not purchase a single CD in 2007, compared to 38 percent in 2006.”

So, while everything looks rosy for the sale of iPods and tracks on iTunes, few music execs have reason to smile. These latest figures no doubt will propel talks by the major labels to push ahead with plans to introduce all-you-can-eat monthly fees to broadband users who want access to their catalogues. If a universal fee is introduced, it might just be called the next “iTunes killer.”