Is anyone surprised at Wednesday’s announcement that Apple has surpassed Walmart as the #1 music retailer in the US? In case you missed it, an independent study by The NPD Group revealed that as of January 2008, Apple’s market share in the music retail business climbed to 19%, leaving Walmart and their 15% in the dust.
Funny–I could have sworn that last February, Apple made big news when it became the #2 music retailer.
Anyone who predicted this, give yourself a pat on the back. But just a pat–no rubbing–because it really was pretty obvious a long time ago. As digital delivery has become a viable mechanism for selling entertainment, it has eroded many of the major costs associated with distribution of these products. The conventional approach worked in favor of bricks-and-mortar retailers like Walmart, who were limited to a certain amount of shelf space but did their homework and picked the few thousand titles most likely to sell.
But shelf space is a thing of the past. A music collection of 150,000 tracks takes up the same amount of physical space as a collection of 150 tracks. I personally keep mine on a hard drive which is about the size of 4 stacked CD jewel cases.
Apple’s iTunes download “superstore” offers, at last count, over two million songs. This kind of scale has helped to usher in a new form of consumerism focused on “micromarkets” — a growing cadre of consumers who reject the notion of entertainment companies and their retailers telling them what to listen to. They have their own interests, their own ways of informing themselves, and finally, a way to access even the most obscure entertainment.
This is just one more manifestation of the truisms laid out by Chris Anderson in his epic book about 21st century economics, “The Long Tail.” Get your copy today, so you have enough time to read it five times… his next book comes out in 2009.