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Only Wal-Mart sells more music than iTunes

NPD Group reports that Apple's digital music store has surpassed Best Buy to take over the No.2 spot. Is Wal-Mart next?

Apple continues to tighten its grip on music sales as iTunes has become the second largest U.S. music retailer.

A report released by tracking company NPD Group, showed that Apple now has more than 50 million customers and sold more than 4 billion songs last year.

Apple's digital music store jumped past Best Buy to capture the No.2 spot behind Wal-Mart stores. Apple is on a roll. It was only last June that the company overtook Amazon as the nation's third-largest retailer.

How long before the company can surpass Wal-Mart to become top dog in music sales?

The good news for the overall music industry is that the amount of music being acquired rose 6 percent, according to NPD.

The bad news is that spending rates dropped by 10 percent due to falling CD sales. Spending among Internet users fell from about $44 per capita to $40. And nearly half of all U.S. teens (48 percent) did not purchase a CD last year, NPD said. That is up from 2006, when about 38 percent of teens made no CD purchases.

NPD estimated that the music industry lost about 1 million CD-buying customers last year.