AAPL vs. AMZN: Digital Media
In 2008, Apple’s iTunes Store became the No. 1 music retailer in the U.S. and it continues to be the top source of purchased music. According to Billboard’s Ed Christman, despite 2013 being the first year digital music sales have declined, iTunes market share continued to grow, hitting 40.6% of U.S. album sales for that year.
Amazon MP3 launched in 2008 and immediately went after iTunes by offering DRM-free downloads and undercutting prices.
AAPL and AMZN continue to compete in digital music downloads, but also in streaming music services, with Amazon’s Prime streaming music taking on iTunes Radio.
The two compete on video as well, with the iTunes Store selling and renting movies and TV shows. Amazon does the same, but offers all-you-can-eat options for its Prime members and has begun producing original content such as “Alpha House” through Amazon Studios.
Also falling under digital media is mobile apps. AAPL has a significant lead here, but AMZN has the third largest app store with a slight edge over Microsoft’s (MSFT) Windows Phone Store.