You’ve got to hand it to Amazon -- they’ve tried just about every angle in their battle to take down iTunes’ music dominance, including lower prices, digital exclusives and DRM-free tracks well before Apple finally made that a reality. So why is none of it working?
The Wall Street Journal is reporting that Amazon.com is failing to make a dent in iTunes’ music sales, despite their best efforts. Their most recent counterattack was a digital exclusive release of the new Kid Rock album -- whose catalog isn’t available at all on iTunes -- for a mere $3.99, released the same day as Apple finally brought The Beatles to iTunes. (We’ll let you make your own judgments on the merits of Kid Rock versus The Beatles…)
Deep price discounts have become a “cornerstone” of Amazon’s MP3 strategy, but despite their lower prices, the company appears to have “made little headway” in their ongoing battle to even dent Apple’s iTunes armor. In the paid digital download market, Amazon’s market share rose to a mere 13.3 percent in the third quarter (up from 11 percent a year earlier), while iTunes continued to climb at 66.2 percent, up from 63.2 percent.
So what about that exclusive Kid Rock album, “Born Free”? The Amazon MP3 digital download made up 12 percent of Kid’s album sales the first week, which clocked in at 189,000 copies -- all despite having no presence whatsoever on iTunes.
On price alone, Amazon MP3 is cheaper than iTunes in almost every case, and the company features 100 different albums for only $5, rotating the selection each month. Such deals require “haggling over what titles will be included in the promotion” with record labels and distributors, who have to temporarily cut their wholesale prices and hope to make it up in volume. However, the practice isn’t much different that what retailers such as Best Buy have to do at retail with physical CDs.
"If you look across the board, we have been very competitive on price," said Pete Baltaxe, director of Amazon’s digital music store. Promotions like the the daily deal are "a great way to get people excited about trying Amazon.
"What we have found is that customers who try our service love it," concluded Baltaxe.
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timmytanner
December 17, 2010 at 7:00am
I'll tell you part of Amazon's music troubles, at least in my opinion. Their UI has been cluttered and clunky since oh, say forever. iTunes is a nice dedicated, clean interface (comparatively) that makes it easy to sample and download music. With Amazon you have to sort through stuff all over the page - your eyes wander all over, not being drawn to anything specifically. No doubt their music is priced well but the whole experience is lacking.
