The failure of mobile music downloads


Philip Elmer-DeWitt is a senior editor at Fortune.

The carriers' combined market share shrank to 4.9% last year as Apple solidified its lead

Songs streamed directly to cellphones, once touted as the next big thing in digital music, failed to take off and is now rapidly losing ground to Apple's (aapl) iTunes Store.

That's the conclusion of a survey in the May 22 issue of Billboard. Based on interviews with distributors representing roughly 90% of the total market, Retail Track columnist Ed Chrisman put together the chart posted below the fold. Among the highlights:

  • Apple, which passed Wal-Mart (wmt) in 2008 to become the U.S.'s No. 1 music retailer, widened its lead in 2009 -- to 26.65% of the domestic music market, up from 21.42% in 2008.
  • The combined efforts of Verizon (vz), AT&T (t), Sprint (s), T-Mobile (dt) and mobile content provider Zed accounted for 4.9% of sales, down from 6.6%. And that includes ringtones.
  • Amazon (amzn) and RealNetworks (rnwk) gained share -- to 7.07% and 1.23%, respectively -- but have a long way to go to catch Apple.
  • MediaNet, which serves Microsoft's (msft) Zune and others, is practically a round-off error, with 0.55% of the market, down from 0.66%.

Below: The Billboard chart.

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