Winning the day, one
download at a time

Digital sales increased "sharply" in 2007, said the NPD Group. iTunes is now the second largest music retailer in the US, with Wal-Mart ranking first.

NPD factored physical CD sales and digital music into its report. Every 12 songs downloaded was considered equivalent to an entire CD.

But though digital downloads were up, overall sales fell 10 percent, likely because of users' ability to buy singles in lieu of whole albums.

P2P downloading increased among teens in 2007. While P2P activity is estimated to occur in 19 percent of US households, NPD found 10 percent of all music purchased in '07 was legally downloaded online.

Overall, legal downloading jumped to 29 million occurrences, from 24 million last year. The rise was attributed to the age group of 36- to 50-year-olds, which bought a large number of digital players in 2007.

iTunes now has over 50 million customers. It sold over 4 billion songs — including 20 million on Christmas Day, 2007.

The figures pushed Apple past longtime number two music retailer Best Buy. It surged past Amazon in July of last year.

A qualitative survey of Mac users recently found that 50 percent of Mac users pay for music online, versus 16 percent of PC users, Adrants wrote.

More findings, including metrics on illegal downloads by tweens, are available from MarketingCharts.