* Amazon had 22 pct of music download market in late 2012
* Amazon share has risen from 7 percent in 2008 -NPD
* iTunes' share slipped to 63 pct in late 2012 from 69 pct
in 2009 -NPD
* Amazon uses Kindle Fire as weapon against iPad, iTunes
By Alistair Barr
SAN FRANCISCO, April 16 Amazon.com Inc
has grabbed more than a fifth of the market for digital music
downloads, helped by the launch of its own tablet computers and
aggressive pricing, according to an industry study released on
AmazonMP3, the online retailer's digital music business, had
22 percent of the market for music downloads in the United
States in last year's fourth quarter, research firm the NPD
Group said in its Annual Music Study.
That compares with 15 percent in 2011, 13 percent in 2010,
10 percent in 2009 and 7 percent in 2008, NPD data showed.
Apple Inc's iTunes store, which turns 10 years old
on April 28, was still dominant with 63 percent of the market in
the fourth quarter of 2012. But that was down from 68 percent in
2011 and 69 percent in 2009, according to NPD.
"Amazon's entry into tablets probably helped," said Russ
Crupnick, senior vice president, industry analysis, at NPD
Amazon launched its own tablet, the Kindle Fire, in 2011,
and last year the company rolled out larger versions of the
device to compete more with Apple's iPad.
Amazon is using the Kindle Fire to try to sell more digital
goods, such as music, video, apps and games, where iTunes
Amazon, known for low prices, has also taken that approach
in music downloads, running frequent price promotions to spur
more sales. In 2011, the company offered Lady Gaga's album "Born
This Way" for 99 cents in MP3 format. Demand was so strong that
Amazon's computer servers stalled, forcing the company to run
the promotion again a few days later.
Amazon has also benefited from a large base of consumers who
buy physical CDs from the retailer. As those shoppers switch to
digital music, the company has managed to keep many of them as
customers, Crupnick explained.
Amazon sells digital music without Digital Rights
Management, or DRM, a technology that limits how people can
consume such content. The company's DRM-free approach boosted
demand because it let consumers listen to music on any devices,
including Apple devices like iPods and iPhones, Crupnick said.
Even as Amazon gains in this area, the focus is shifting to
digital music streaming, currently provided by smaller companies
such as Pandora Media Inc and Spotify.
Google Inc, Amazon and Apple are among Silicon
Valley powerhouses that have been sounding out top recording
industry executives as they look for ways to make streaming