Apple iTunes has increased its lead in the U.S. music distribution market, but an interesting battle from the yet-to-be-launched Google Android Music store is expected.
iTunes first became the top music seller in 2008, and has worked to extend its lead since then. The service ended 2009 with more than 26.7% marketshare, a 5.3% increase from the 2008 sales tally.
In February of this year, iTunes reached 10 billion music downloads, with that number is only expected to increase in the years to come. iTunes offers a large catalog of music, TV episodes and movies -- and Apple continues to add new content.
Wal-Mart remains in the No. 2 position with 12.5 percent marketshare, and Best Buy is slotted in at the No. 3 position. Brick and mortar retailers are limiting floor space for CDs -- as digital downloads increase and CD sales decline -- with Wal-Mart, Best Buy, and other retailers also facing similar problems.
Retailers expect the continued transition to digital music to carry on in the immediate future, which has Best Buy and other stores unsure how to handle the change.
Online retailer Amazon also has had trouble selling music CDs, with its current share of the music market calculated at 7.07 percent. Its digital music service has increased in marketshare, however, as customers become more familiar with Amazon's digital offering.
The music industry still isn't sure how to deal with online music -- the International Federation of the Phonographic Industry (IFPI) said more than one year ago that 95% of digital music is pirated. A few months later, the European Union said the music industry has to be more willing to open up online music.
At the Google I/O developers conference last week, Google's engineering VP Vic Gundotra announced that the company will be releasing software to allow customers to stream music from their desktop to their Android phones. This software comes from Simplify Media, which Google purchased 2 months ago. Also announced was the Android Market Music section, which will allow customers to purchase music straight from their Android phones. Release dates, pricing or other details on the Android music offerings have not yet been disclosed.
The Google Android Music store won't have an immediate impact on the music industry, but it's definitely capable of shaking up the market, especially as the number of Android smartphone users continues to grow.
