iTunes Store Now No. 2 Music Retailer

Apple's baby takes back seat only to Wal-Mart
By Sam Gale Rosen,  Newser Staff
Posted Feb 26, 2008 3:00 PM CST
iTunes Store Now No. 2 Music Retailer
Gaston Chabolla, 15, searches for CDs at a music store Dec. 20, 2007, in Los Angeles. Major recording labels, long-criticized for being too slow in adapting to changes brought by the Internet over the last decade, are under pressure to explore new ways to get music fans to pay for music, leading to...   (Associated Press)

iTunes is the world's No. 2 music retailer, a ranking that includes stores that sell CDs. The reason is a combination of a modest increase in digital music sales and a sharp dive in CD sales, so the news isn't much to celebrate for the music industry. And kids are leading the way in abandoning the CD format, Ars Technica reports.

"In fact, 48 percent of US teens did not purchase a single CD in 2007, compared to 38 percent in 2006," writes the group that tracks market data. The iTunes store is now second only to Wal-Mart, reports Ars Technica. Only about 10% of ownloads are legal. "The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer," says an analyst. (More iTunes stories.)

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