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New Madonna for $3.99? Amazon Takes Aim at iTunes With Variably Priced MP3s

6/18/08, 12:18 pm EST

Last year, NBC CEO Jeff Zucker complained that Apple “destroyed the music business in terms of pricing” by sticking to its guns on the 99-cents-per-song model. But now entertainment execs might be landing some payback, in the form of Amazon MP3. This week, the online-shopping powerhouse’s DRM-free download store announced two ongoing discount promotions, called “Daily Deals” and “Friday Five,” and both feature big names at basement prices. But the trade-off for labels sick of iTunes pricing is that some tracks at Amazon MP3 cost more than the standard 89-99 cents (a seven-minute track from Coldplay’s Viva la Vida is going for $1.94).

Amazon MP3’s “Daily Deals” offers popular titles at a hefty discount, while “Friday Five” unloads five classic albums for $5 weekly from Friday to Sunday. In honor of Coldplay’s recent release, “Daily Deals” offered X&Y for $1.99 on Tuesday, A Rush of Blood to the Head on Wednesday for $1.99, Parachutes on Thursday for $1.99 and Brothers & Sisters on Friday for 99 cents. Similarly, Madonna’s Hard Candy, which is still going for $13.99 on iTunes, was recently a “Daily Deal” at $3.99. The “Friday Five” selections are equally tempting: This week, The Rolling Stones’ Let It Bleed can be had for a single Lincoln, and you don’t have to worry about ripping it to your iPod, because it’s already in DRM-free, digital form.

So where does this leave Apple, who has been tussling with the labels for a while over the strict iTunes pricing model? The labels want demand-based prices and Steve Jobs likes his one-size-fits-all approach, but sustaining it has been another story: Apple lost NBC over the disagreement, but inked a deal shortly after with HBO on variable pricing of its cable shows. Now that Amazon has thrown its digital hat into the ring with daily discounts, it’s going to be harder for iTunes to keep its stranglehold on the downloading business. Especially now that Amazon is making music-surfers offers they can’t refuse.

[Photo: Getty]


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Comments

Steve | 6/18/2008, 1:42 pm EST

$5 should be top-tier pricing for mp3 albums. No packaging, no manufacturing, no shipping, no retail costs, and maybe 1/5th the sound quality.

I’ve mostly given up on CD’s, it’s a dead format, and I do believe that as storage space increases, MP3 will eventually be replaced by a better-quality digital file format.

However, 1/4th of the product (at best) should be 1/4th of the price of a CD. But this is the music industry, who probably won’t ever be smart enough to figure that out on their own. When was the last time a label executive had to be a music consumer? 1975?

Joe | 6/18/2008, 3:12 pm EST

Well put, Steve. I like the utility of downloads, but you’re basically buying nothing when the music has such little fidelity, and no tangible aspect. I’ll continue to buy CDs as long the prices are pretty comparable, because the value is so much greater. I can also still play CDs in a bunch of places that my iPod doesn’t go.

Ish | 6/18/2008, 4:37 pm EST

Steve and Joe, most consumers wouldn’t know the difference between an MP3 and a CD playing out of the same stereo. The thing that will drive prices down is competition. There’s just too much crap out there, and if you’re going to offer 1 track at a time, you might only sell the single, so you might as well try to get $2 or $3 for the whole album, even if most of it is filler.

kkk | 6/18/2008, 8:15 pm EST

That’s $3.98 more than this pissmop cvnt is worth.

madonnasworld | 6/19/2008, 1:16 am EST

comment by kkk; shut ur hole
madonna is the best

Will | 6/19/2008, 9:08 am EST

Out of curiosity, how on earth do they know Let It Bleed will be in this Friday’s discounts?

Support Good Music | 8/24/2008, 1:02 am EST

Steve: I agree that downloads should be less but certainly not 1/4. You have to remember that packaging and shipping on CDs is less than $1. Much of what is paid on CDs is royalty and licensing. Now of course the labels have their profit built in but that is true of any business in a free market. Fault gas companies, clothing labels and starbucks for mark-up b4 music labels. I believe 79 cents-1.99 p/song depending on length is fair…$10/cd is fair; $8/album download is fair. More of the profit should be going to the artists and songwriters but capitalism is what it is. And to be fair the labels do a pretty good job of marketing.

As far as MP3 quality, well it def isnt cd quality…hopefully amazon and itunes will sell lossless in the future.

KKK: stop using blogs to vent your anger from your childhood! We don’t care about your pain, thats what psychologists are paid for, to pretend that feelings of a**holes like U matter!

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