Idolator
Fortune has an article on Amazon's MP3 efforts pegged to a possible deal with the long-in-the-works MySpace Music project, in which it would serve as the backend for the social-networking service's digital download store. Amazon currently holds the title of No. 2 digital-music seller, but its market share remains in the single digits. Fortune posits that the "one-click" access from MySpace might indeed boost those numbers. (Hey, it worked for SnoCap! Oh, wait.) The story also shows that the majors' willingness to play ball with Amazon on the idea of "dynamic pricing" has resulted in great bargains for the consumer, instead of a world where a single song is almost as expensive as its truncated-to-60-seconds ringtone version:
Here's another thing that helped. Amazon wouldn't have attracted many customers if it sold songs for 99 cents just like iTunes. So it cut its prices. Today, Amazon offers one-sixth of the 5.9 million tunes in its library - including the 100 most popular tracks - for 89 cents each. It sells some classic albums - like Miles Davis' "Kind of Blue" - for as little as $1.98.
It's tough for a pure-play digital music company like Napster to slash prices like that. But Amazon is betting that some of the people who buy a cheap jazz album will stick around and also purchase a $149 digital camera. "Amazon's game here is like Target or Best Buy," says Ted Cohen, managing partner of TAG Strategic, a digital entertainment consulting firm.
See, I thought that this "dynamic pricing" was something that the labels wanted because that way, they could also charge more than Apple's standard $9.99 for new albums, and more than 99 cents for certain songs. Again, I know it's Fortune, and thanks to their shriveled word count and Time Inc. pedigree it as a publication tends to paint a happy face on a lot of things, but shouldn't the way the labels have tried to dicker with Apple—on matters involving both digital-rights management, which the Fortune piece also notes as a reason Amazon is doing as well as it is and pricing—have been noted? And shouldn't the multiple consequences of the major labels' willingness to deeply discount their product for Best Buy, including the devaluation of product that pretty much opened the door for consumers to feel like music was nearly free and be pretty much OK with acquiring it via peer-to-peer, be noted as well?
By the way, remember last week, when Paul Westerberg released that one-track, 49-cent solo album on Amazon only, and it shot to the top of the digital-download service's album chart? Well, however many copies it sold wasn't enough for it to place on the 50-album Digital Albums chart this week, where the lowest-selling album (Colbie Caillat's Coco) sold 1,700 copies. (I don't have SoundScan database access, so I can't tell you exactly where the album placed, alas.)
Amazon: The Avis of digital music [Fortune]
Comments
This is a really good piece of commentary Maura.
On the pricing thing, I could swear I read something about Amazon going against the wishes of the majors with their lower than iTunes prices. Maybe I am remembering this wrong. Maybe that's what you're saying too.
At any rate, as a consumer, I'm quite impressed with Amazon's service. Although I am an Apple user, I'd really much rather have plain old mp3 files that I can play on anything than AAC files that I'm limited in their use. Not to mention they are a higher bit rate and cheaper, usually.
(Sidenote: whatever happened to Steve Jobs' push to rid the world of DRM? Wasn't it almost a year ago he gave his dramatic speech, yet 3/4 of the iTunes music store is still DRM protected. This is something I've been wondering about for a while and I'd love to see someone look into it, because I can't help but feel Apple is as much to blame as big media.)
Interesting thought about the Best Buy prices lowering the value of music. For me, it's always been difficult to justify paying the same for a download as physical product when you're not getting the same thing. You rarely get liner notes or art beyond the cover. The medium, by it's nature, gives you less quality than a physical CD (untill/unless they go to lossless files, which I doubt is going to happen.) There's no manufacturing costs. Etc., etc. Though I think you have a point about Best Buy, I have to wonder how many consumers think like I do and just don't see mp3 or AAC downloads as being the equal of a physical CD.
I really like the Amazon MP3 store, but I think they're in a sort of catch 22 where the people who would care enough to want to escape the DRM-enforced integration of the iTunes music store may not be types of people who would buy digital music in enough quantities to help the bottom line.
I've bought a few singles from Amazon, but aside from one or two $2-4 super deals, I would almost never buy a full album in a digital-only format.
The Amazon MP3 store is essential for out-of-print albums or CDs.
Amazon MP3 is the best digital music store out there if you want to find Top 40 stuff. Over the past several years since the iTunes Store has been around, I've purchased only about 20 -30 songs from iTS. However, in less than a year, I've purchased 3x that from Amazon MP3. Like Captain Wrong says, it's higher bit rate and sometimes lower prices than ITunes. Plus, they play fine on my Mac/iPod.
To make it more popular, though, they need to promote the music store on the Amazon.com homepage. That's where most people go who don't know about the mp3 store.
About the variable music prices: I wonder if this is in line with what Amazon is paying out to the labels? The reason I ask is because I recall the pissing fight between Universal Records/NBC Universal and Apple about variable pricing. Apple didn't budge and lost NBC. However, players like Zune was able to grab the content because they do pay variable prices... only the consumer does not. Zune pays much less for each older TV episode sold and more for the newest ones. That's the variable pricing the labels/studios may be looking for and perhaps Amazon is giving it to them, too.
Good article, btw.
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