Amazon has lowered its price for top-selling songs in a bid to compete with top retailer iTunes in the downloadable music market. The company, which is presently a distant second place behind iTunes as the most popular download retailer, has dropped its prices for best-selling hits by Katy Perry, Lady Gaga, Justin Bieber and Jennifer Lopez to 69 cents, nearly half the cost of the same songs on iTunes, where they sell for $1.29. In many cases, Amazon was already selling the tracks for 89 cents.
This is a very aggressive move, but it is consistent with Amazon's digital music strategy. The online store regularly sells albums at deep discounts, which has led to significant sales spikes for new and old records. Despite the significant price cut, artists and labels are unlikely to lose much money, as Amazon typically treats mp3 sales as loss leaders.