Seriously, you lose 10% of your customers in a few months and someone's got the cahones to say, Amazon no threat to iTunes:

Amazon's MP3 service may be growing, but it's not taking much of a bite from iTunes, according to the analysts at NPD.

The analysts are reporting that just 10 per cent of those buying music from Amazon's US digital download store are defectors from iTunes. NPD analyst Russ Crupnick explained this as a 'healthy indication that the digital music customer pool can expand into new consumer groups who have not yet joined the iTunes community'.

Who is paying Crupnick off here? Of course the more interesting question is where were the Amazon mp3 buyers getting their music before? Are these losses from Napster? Freeloaders on Limewire and KaZaA style services? I know I've largely defected from iTunes, and I get aggravated at myself when I've purchased from iTunes and begin to burn an mp3 CD, as my car's mp3 player don't play that AAC jive. I've rented a 99¢ movie from iTunes recently, but that's about it.

As I've said before, finding my music for me quickly is worth a premium. If you don't want to play AAC, Amazon is your best bet. So if you were searching Gnutella networks before, maybe you're throwing a few bucks Amazon's way?

Regardless, losing 10% of your market is a big deal. If we believe the whole barrier to entry deal, Amazon's one barrier to entry away from about %20 of the market, two from 40%, and three from tipping. One of those is the iPod. What are the other two?

The article just happens to add:

Amazon has at least one major advantage over Apple: Apple's DRM-free tracks are available only from EMI Music, while Amazon offers unprotected MP3s from all four of the major record labels. Also, Amazon sells digital music at a higher bit rate and its songs are often cheaper.

If I'm Amazon, I'm impressed with that quick a move to 10%, and those benefits are exactly what's powering the siphon-ige.

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