With iTunes being the leader in digital music, Amazon.com has tried to compete by slashing prices. The latest example of this occurred more recently when Apple presented the public with the Beatles’ catalog. The move was so important because the Beatles have never been available to iTunes users. In a smaller capacity, Amazon decided to release Kid Rock’s latest project for $3.99. Rock’s music is also not available on iTunes. Still, despite all of these price cuts, it doesn’t seem like Amazon is a threat to Apple for now. In a recent article in the Wall Street Journal, Geoffrey Fowler and Dan Gallagher discuss how this might change.
It seems Amazon’s discounts on albums may allow it to prosper. At a time when album sales are down, digital albums seem to be booming, particularly more than single song sales. The article points to Kid Rock’s latest disc, where Born Free sold 189,000 copies. Twelve percent of that came via digital sales, despite the album not being available on iTunes.
Amazon also has the Daily Deal, where an album could cost less than $4.00 and a monthly deal where 100 albums can be sold for $5.00 each. Amazon is currently eating the losses for some of these deals, as was most likely the case with Kanye West’s My Beautiful Dark Twisted Fantasy, but it may pay off in the end. That’s because, as the article notes, these discounts win new customers for the brand.
The article further points out statistics to back its claim that digital album downloads have grown. It notes that sales of actual discs have fallen 20% this year. However, digital album downloads soared 13% to about 75 million.
On the flip side of this is the perspective of artists and others involved in creating the product. It seems some are worried that the lower price tags cheapen the value of the art. For more on the article, visit the Wall Street Journal.