Amazon Music Store Sales Underwhelming?

ArsTechnica nabs a NPD document showing that Apple’s iTunes store (AAPL) became the biggest music retailer in the U.S. in January, passing Wal-Mart (WMT). This is impressive, but also expected.

UPDATE (4/16): New data from NPD Group about Amazon’s digital sales. Still more questions than answers.

More interesting to us — Amazon’s shrinking market share. Last spring Amazon had a 6.7% share of the music market, and since then it’s launched a much-ballyhooed music store of its own, selling DRM-free tracks that consumers were supposedly clamoring for. But now, NPD says, Amazon’s share has dropped to 6%.

What gives? Obviously, almost all of Amazon’s music sales come from CDs, and we assume those are slumping dramatically. (Though we bet not as dramatically as brick-and-mortar retailers, which have been cutting back on floor space for CDs and don’t get the long-tail benefits that Amazon does.) But digital should have picked up some of that slack — and more, if you believe USA Today’s recent story, which said Amazon was now a “strong No. 2 competitor to Apple.”

So: We don’t imagine we’ll ever get Amazon (AMZN) to cough up sales numbers for its digital music business, but at this point there ought to be enough of you out there (labels, managers, publishers, etc.) with some insight into how this business is doing. Want to share it with us? You can do so by writing to pkafka AT alleyinsider DOT com or by using our anonymous tip box.

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