Move Over Target and Best Buy, and look out Wal-mart, because iTunes is now the #2 music retailer, according to data released by research firm NPD Group. That’s music retailer, not just online sales, and it is partially due to both an increase in online sales and a decrease in CD sales, with a net decline in total dollars per capita spent on music.

Apple took the opportunity to announce that it now has more than 50 million iTunes Store customers, and that it sold 20 million songs on Christmas Day 2007 alone.

"We’d like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone," Eddy Cue, Apple’s vice president of iTunes, said in a statement released by Apple. "We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes."

The data covered in NPD’s research represents music sales in 2007, and excludes wireless -- i.e. cell phone -- sales. As part of its process, NPD counted each CD sold as 12 tracks.

The firm also said that some twenty-nine million consumers "acquired" digital music legally during 2007, specifying the legal online download services such as iTunes. That represents a 5% increase compared to 2006, and that growth was largely driven by consumers age 36 to 50. NPD said that demographic "aggressively acquired digital music-players in 2007."

What about the kids? Youth has long driven music trends since the invention of popular music early in the 20th century. According to NPD, however, kids today are too busy stealing music through P2P networks to actually pay for it in either CD or digital format.

One million people stopped buying CDs in 2007, and NPD said that a majority of those people were "younger consumers." More specifically, some 48% of U.S. teens didn’t buy a single CD during the year, and that’s a huge increase compared to the 38% who eschewed CDs during 2006.

Be that as it may, digital downloads now account for 10% of total music sales.

"The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer," said Russ Crupnick, entertainment industry analyst for The NPD Group, in a statement. "With so many baby boomers and gen-Xers entering the market, there are certainly opportunities to sell more digital albums, promote older catalog titles, or create bundles that will raise revenues. In the near term that’s going to be the best means available to narrow the gap on dwindling CD revenues.