Amazon Is Now Selling a 27-Song Album Download for $3.99

Are these deals good for anyone besides the music fan?

After dropping the price tag on hundreds of downloads to 69-cents, Amazon is now offering a 27-song album from Bruce Hornsby for just $3.99.  The album, Bride of the Noisemakers, is a live album that is also being streamed on Amazon.  “Today only, get @brucehornsby’s brand-new 27-song album for $3.99,” Amazon tweeted Monday for its Daily Deal.  That works out to just 15-cents per track.

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So how low does this go?  This is hardly an isolated case, but rather part of an incredibly aggressive price-chopping strategy to grab marketshare.  So far, that has only created a modest impact in the marketplace (some estimates place AmazonMP3’s marketshare in the teens). And for the most part, Apple hasn’t achieved its dominance through aggressive discounting, and sources note that Amazon is oftentimes paying full label wholesale price for the privilege.

Which means they’re losing lots of money through a subsidization strategy, with the assumption that enough fans care about price to shift to AmazonMP3 – en masse.  That’s a huge assumption, especially given competition from free channels and huge loyalty to the iTunes ecosystem.

Still, there are no signs of Amazon letting up, at least when you read the financial tea leaves.  Just recently, Goldman Sachs estimated that Amazon would spend nearly a billion dollars on research and resources this year alone, part of a philosophy that CEO Jeff Bezos wholeheartedly defended last week.  On the music side, this all looks like good, old-fashioned cash-burn, though there may be a reward for all this bottom-fishing: the discovery of a real sweet-spot price on the paid side, one that falls well below 99-cents.

 

7 Responses

  1. @Magnotron

    Christopher Davis

    For Amazon, data is worth more than music.

  2. @MusicTechPolicy

    Editor Baker

    More anti-artist moves from Amazon

  3. @digisingle

    Digisingle

    good strategy? Music fans must love it..

  4. Ira Mayer

    I wonder how many takers they’ve had for the 99 “essential masterpieces” of Mendelsohn’s music for $2.49.