ITunes Edges Out Music Stores

Apple's popular iTunes online music store edged out three traditional music retailers during the July through September time frame to leap into the number seven spot of top U.S. music retailers--and it's likely to displace more stores by the end of the year, according to the NPD Group, a market research company.

The iTunes Music Store beat out Tower Records, Sam Goody, and Borders in NPD's third quarter ranking to crack the top ten for the first time ever, said the NPD Group in a Monday report. The steep climb of the online music service to seventh place from fourteenth during the same time last year reflects the speed at which users are turning to music online.

"With the growing interest in digital music, forecasts of more iPod demand this holiday, plus the stocking-stuffer appeal of iTunes gift cards, we can expect Apple to increase its share even more by year's end," said Russ Crupnick, music and movies industry analyst for the NPD Group, in the report.

Retail Runners Up

NPD Group ranked the iTunes Music Store against traditional retailers by counting 12 songs per album to compare online sales with physical CDs and singles.

Wal-Mart Stores retained its first place ranking as the top music seller, followed in order by Best Buy, Target, and, all of which held onto their previous spots, according to NPD. For Your Entertainment leaped to fifth place from tenth, and Circuit City Stores dropped one spot to sixth.

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