Amazon are slipping in the physical music market with HMV, the high street retailer, being the unlikely winner although in part that’s due to their mail order service – a competitor to Amazon Prime.
Amazon’s slide isn’t all bad news for the online marketplace however, with the increasing installed base of Alexa Echo devices, thousands of their customers have switched to their Amazon Prime music streaming media service which helps to explain why they my buy fewer CDs than in the past.
HMV overtook Amazon in the 12 weeks ending 25th of September to become the UK’s largest music retailer, attracting 41,000 new shoppers and growing its share of the overall physical entertainment market by 3.1 percentage points. HMV have 28% of the market, well ahead of Amazon’s 21.1% of physical music.
“Meanwhile Amazon has seen a less positive performance in the latest quarter as 14% of its shoppers left the physical music market. It’s likely we’ll see this decline accelerate in the coming months as Amazon places greater focus on its digital offer. Amazon Music Unlimited is scheduled for launch in early 2017, and the new Amazon Echo will play a crucial role in the success of the retailer’s streaming service. With Black Friday just around the corner, strong promotional activity is likely to boost sales of the new device, persuading even more of Amazon’s customers to make the switch to digital.”
– Kantar Worldpanel