Amazon MP3, the DRM-free digital music store, is far from a rival to Apple’s iTunes, claims a Tuesday report. The MP3 arm of online retail giant Amazon.com has only 5 percent to 10 percent of the market, compared to more than 70 percent for iTunes, according to All Things Digital.
The report’s estimate cited an unnamed label executive.
The one year-old MP3 store “has failed miserably” as a rival to iTunes, Peter Kafka wrote. Amazon earned $39 million on $82 million in sales – the bulk going to Universal Music Group, the report suggested.
Despite an apparently inability to chip away at Apple’s lead the report said Amazon MP3 provides T-Mobile G1 handset and MySpace an alternative to iTunes to enter the digital music business.
Sony BMG may also be using Amazon MP3 as a foil to force Apple to change how it sell songs. Monday, a report said Sony was asking Apple to modify its relationship to mirror the label’s agreement with Amazon.
“The only entity that has reliable numbers is Nielsen SoundScan. Perhaps someone is whispering in his ears?” Gartner media analyst Mike McGuire told Cult of Mac.
What’s the problem with Amazon? Unlike Apple, Amazon sees everything as a commodity.
“Amazon’s MP3 store works, but it’s just another segment of Amazon’s big online store,” McGuire said. The company had almost $4.3 billion in sales for the last quarter.