iTunes now 70% of digital music sales, but Amazon growing

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Apple's (NASDAQ:AAPL) iTunes multimedia storefront now accounts for 70 percent of all premium music downloads in the U.S. according to new data issued by market research firm NPD Group. iTunes' growth is slowing, however--NPD notes its share of the digital download market has remained essentially flat since the first quarter of 2009, increasing just 1 percentage point since that time. Rival AmazonMP3 increased its market share by 4 percentage points, and now represents 12 percent of the U.S. digital music market.

Sales of digital tracks and albums accounted for 40 percent of overall U.S. music market share in the first quarter of 2010, a gain of 5 percentage points since Q1 2009, NPD said. Adding physical music purchases to the equation, iTunes still leads with 28 percent of all U.S. sales, a 4 percent year-over-year leap. Amazon and big-box retailer Walmart are now tied at 12 percent each.

The U.S. Department of Justice is reportedly investigating Apple's digital music business, with a particular emphasis on allegations the computing giant leveraged iTunes' market dominance to persuade record label partners to refuse Amazon.com exclusive access to pre-release content. Citing several sources briefed on the investigation, The New York Times reports the DOJ antitrust probe is still in its formative stages--investigators have already interviewed several major record labels and Internet music firms, with the discussions exploring the dynamics of selling music via digital channels. The investigation follows reports Apple asked its content provider partners to decline participation in Amazon's "MP3 Daily Deal" promotion, granting the online retailer the exclusive right to sell certain songs for one day prior to their widespread commercial release--insiders say Apple punished participating labels by withdrawing iTunes marketing support for those songs.

For more on the U.S. digital music market:
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