Apple's iTunes digital media storefront now accounts for 25% of all music sales in the US, up from 21% last year and from 14% in 2007, according to market research firm NPD Group.
Retail giant Wal-Mart accounts for 14% of all US music sales between its physical CD sales and online sales.
iTunes passed Wal-Mart to become the largest US music retailer in early 2008. iTunes represents 69% of all digital music purchases in the US, followed by Amazon MP3 at 8%.
Despite the surging popularity of digital music, physical CD sales still dominate the US market, accounting for 65% of all music sold during the first six months of 2009.
Wal-Mart leads all sellers with a 20% share of the physical music market, followed by big-box retailer Best Buy at 16% and Target and Amazon.com, tied at 10% each.
“Many people are surprised that the CD is still the dominant music delivery format, given the attention to digital music and the shrinking retail footprint for physical products,” said NPD Group vice president of entertainment industry analysis Russ Crupnick in a statement.
“But with digital music sales growing at 15% to 20%, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010.”
For more on the NPD Group report:
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