Amazon Undercuts iTunes With 69-Cent Pricing on New Release MP3s

[archipellago]

It would seem unusual to give a company with 10% of the revenue at least 35% rebate over a company with 90% of the revenue. This looks very much anti-competitive to me.




They have even much cheaper downloads sometimes; I suspect some were pricing mistakes. The iTunes LP "Plastic Beach" by Gorillaz was £1.69 (18 songs, one video + extras), probably a mistake "24 Hour of Classical Music" is exactly that for £7.99.




You know that you have to pay tax on all items that you buy without paying sales tax? Most people just "forget" to tell the tax man.

anti-competitive when the prices goes down..??

wow, which planet do you live on..?

 

[blow45]

including Katy Perry's "E.T.", Jennifer Lopez's "On the Floor" and Lady Gaga's "Born This Way."

what has the world come to in terms of music to consider these the best current music scene has to offer, take ANY decade prior since recorded music began and music would have been better, go 10 years or more back and these wouldn't even be in the top 200, I pity kids these days with the garbage they have to look forward to in terms of new popular music... really atrocious, anyone paying even as cent for this trite is seriously misguided.

Sad to see we have all the great tech now but the music is so much worse than what it used to be, and that's not just the usual oh how good we had it in the past type of reminiscence, it's reality...

1.29, .69, 10000,0000,0000.5, its rubbish anyway...

btw, what's with the rating system in the posts already? it sucks don't you get it? everyone's saying it does, just so you know, which you already do, but you don't seem to care...

 

[Socratic]

Apple pays 70% straight to the record companies, which would be $0.90. If Amazon pays the same, then they have $0.21 loss before they even start. Or Amazon gets different prices than Apple, which would need some explaining.

At the moment the record labels are pretty much Apple's bitch. They don't like that, and in splitting the digital market (by giving a leg up -ie lower costing- to Amazon and probably a few others) they eventually restore their power to set the terms. Apple is a vendor for their product, yet is in almost complete control. That's normally the other way around.

 

[AppleScruff1]

why is paying less out of your pocket not a good thing? (unless i am reading you incorrectly...)

Paying less is not good. If you are a true Apple believer, you want to pay as much as possible so you can high five when Apple has record profits. It's not about the consumer, it's what's best for Apple.

 

[doctor-don]

While looking up album info, I received a notice that some songs were now priced at $.69. None of the songs in the albums I was researching was priced that low.

Yep! Select songs. Not especially any big deal.

 

[iEvolution]

Paying less is not good. If you are a true Apple believer, you want to pay as much as possible so you can high five when Apple has record profits. It's not about the consumer, it's what's best for Apple.

Wow some people here are incredibly close minded. Nothing comes good out of being dedicated to one brand, nothing. You don't get any perks from the company, you lose out on possible better competitor products, you lose money, you lose out on knowledge of other products, etc.

Furthermore you are dedicated to a brand that is currently one of the most unethical companies out there, the only other company that compares is Sony. Don't get me wrong, I love the iPod line and I love the iTunes software (even if its bloated, management is 2nd to none for music), but the company does some shady things to save a few bucks, and go to great lengths to give the brand a positive name in the media (which includes banning certain individuals from their events if their reviews aren't what apple likes..iLounge 3rd generation shuffle for instance).

BTW, Apple's primary profits come from hardware not the music store.

I hate how slow Apple's servers on iTunes have been for the last couple years, definitely gonna have a look into amazon's store.

 

[AppleScruff1]

Wow some people here are incredibly close minded. Nothing comes good out of being dedicated to one brand, nothing. You don't get any perks from the company, you lose out on possible better competitor products, you lose money, you lose out on knowledge of other products, etc.

Apple's primary profits come from hardware not the music store.

I hate how slow Apple's servers on iTunes have been for the last couple years, definitely gonna have a look into amazon's store.

But this is how the true Apple believer thinks. If Apple doesn't make it, you don't need it. If anyone else makes it, it's junk. All that matters is that Apple makes huge sums of money so we can brag about it here. We want to pay a high price so Apple can continue to produce products that we want to buy and we don't want any competition. All we care about it what Steve says.

 

[iEvolution]

But this is how the true Apple believer thinks. If Apple doesn't make it, you don't need it. If anyone else makes it, it's junk. All that matters is that Apple makes huge sums of money so we can brag about it here. We want to pay a high price so Apple can continue to produce products that we want to buy and we don't want any competition. All we care about it what Steve says.

That's your choice man and I respect it, we all have our own ways.

 

[AppleScruff1]

That's your choice man and I respect it, we all have our own ways.

Sorry, I'm actually being sarcastic, but you will find a lot of users here who behave just as I have described. You'd think that they sat on the board of directors. I agree with you, competition is good and it is good to be open minded and not have blind loyalty to one company. But the majority here will disagree with that.

 

[iEvolution]

Sorry, I'm actually being sarcastic, but you will find a lot of users here who behave just as I have described. You'd think that they sat on the board of directors. I agree with you, competition is good and it is good to be open minded and not have blind loyalty to one company. But the majority here will disagree with that.

LOL pretty sad when I couldn't read that as sarcasm as it is not unheard of that people are like that on this board.

 

[Sequin]

This would be awesome news if I hadn't stopped paying for music the second Napster was released

 

[caspersoong]

That's tempting. Only if it were available here. Why isn't it?

 

[h0mi]

Amazon also expanded their $5 album selection to about a thousand instead of the usual hundred. But I think that is just for this week.

My only beef with their mp3s is the category chosen in the mp3 tags. I bought some Christmas music that was tagged as miscellaneous not Christmas... That is annoying.

 

[SandynJosh]

How stupid can Jeff Bozo be?!
By undercutting the already cheap ala cart business model the record labels and the artist and writers etc are going to fell the pain right down to their pockets.

I'm not sure at what price point predatory pricing becomes an issue, but I would think that Amazon may have crossed that line.

Now, it may be possible that Amazon is not offering the same product at $.69 a song. For example I have downloaded a song from Amazon that I paid $.99 for, and was surprised to see it did not have the same sample rate as my iTunes songs.

At some point I can't see the studios nor the artists wanting to take an income-per-song hit without having their say about it. If Amazon is selling music at a loss per song, then the FTC might have a say about that.

 

[Rodimus Prime]

I'm not sure at what price point predatory pricing becomes an issue, but I would think that Amazon may have crossed that line.

Now, it may be possible that Amazon is not offering the same product at $.69 a song. For example I have downloaded a song from Amazon that I paid $.99 for, and was surprised to see it did not have the same sample rate as my iTunes songs.

At some point I can't see the studios nor the artists wanting to take an income-per-song hit without having their say about it. If Amazon is selling music at a loss per song, then the FTC might have a say about that.

you can try that argument but Amazon can just simply point out that it is a hell of a smaller of a player compared to iTMS in that department and is just trying to gain some marketshare.

Remember rules are different for top dogs that it is for the minor ones.

As for sample rate it is around the same point as Apple. It use VBR encoding compared to Apple 160 ACC. End result is they sound the same.

I like Amazons system because it will play in anything that plays MP3s. ACC it is hit or miss if it will work. For example I can play MP3 burned to a data cd in my car . I can not play ACC files burnt to a data cd in my car.

 

[AidenShaw]

I bought some Christmas music that was tagged as miscellaneous not Christmas... That is annoying.

Agree - christmas music is quite annoying.

And the selection of Saturnalia music is quite thin.

 

[SactoGuy18]

I believe that Amazon uses 256 kbps variable bit rate compression for their MP3 Download store. Why MP3? The reason is simple: it allows maximum compatibility with all music players that can play back MP3 files out there. Sure, Amazon could use the AAC 256 kbps VBR format, but outside of the iPod support for the AAC format is iffy at best (only the higher end players from Sandisk's Sansa line and Creative support AAC).

 

[rman726]

Remember when tiered pricing was announced, Steve said more songs would be available for $.69 than $1.29...I have yet to see a $.69 song.

Agreed. I heard Summer of 69 on the radio earlier today in the car, and the song has been stuck in my head all day. So I decided that would be a good song to test, as you would think a song from the 80's would be a song that would at highest price be $0.99. Low and behold, it is $1.29 on iTunes.

So apparently not only popular new songs, but "popular" old songs are even $1.29. I bought a couple of "Best Of" albums from Amazon today that were $5. You can't beat getting 12-15 of the top hits from artists for $5. Just 4 of those songs would cost you $5 on iTunes if they were $1.29, which most songs seem to be.

 

[a.gomez]

fantastic!... I already bought an album so I could get the free 20 Gig Amazon Cloud player for a year

 

[mattnotis]

Torrents are free!

 

[Gamoe]

Yes, competition is a good thing... But how much real leeway do any of these companies have to set price points? It seems to me that the labels are the ones mostly setting the pricing, and that's in their favor, not in the customer's favor.

It seems the labels allow different prices for different stores in order to "game" the system in their favor- they'll allow Amazon to sell for less in the hopes of eating into Apple's market share and taking away more of Apple's leverage to negotiate for lower costs for itself (and customers).

 

[mgauss7]

Amazon is worth 80 billion selling toilet paper

What doesn't Amazon sell? toilet paper, tampons, tooth paste, and it is worth 80 billion, when it should be worth 1 billion. It is an uninspired discounter, like online-Walmart.

On Amazon you can buy used comic books, used read softcover novels, used 10 year old PaperMate pens, it is like a giant flea market.

They need sales and prestige to keep up their scam.

High valuations should belong to high tech companies. Amazon says the Kindle is their heart, when it represents less than 0.1% of its sales.

On Amazon they sell fertilizer made from dung.

Apple is instead a high tech company. It makes money by selling high advanced technology.

Unlike Amazon, which has no research and development budget (how much research do you need to carry Q-tips and tampons?), Apple is not a scam. It is what it says it ism a high tech edge company. Amazon says the same, but it is sad flea market selling dirty used bird feeders.

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As noted by the Los Angeles Times, Amazon has taken Apple's iTunes Store head-on in the digital music marketplace with its new feature of 69-cent on popular new release tracks. The new, lower price marks a substantial discount from iTunes, which typically charges $1.29 for current hits.The report notes that Amazon has been stuck at about 10% of the digital music download market for several years, finding itself unable to eat further into Apple's dominant position with iTunes.

Apple initially used a standard $0.99 price point for iTunes Store music content, but shifted to a tiered pricing model in April 2009, with much of the store's content remaining at the original $0.99 price point but certain popular content bumped up to $1.29 while older back catalog material in some cases dropped to $0.69. Amazon and Wal-Mart quickly followed suit with their own tiered pricing models.

Apple's shift to tiered pricing was made at the request of major record labels seeking more control over content pricing and was part of the negotiations that led Apple to be able to offer its entire iTunes Store music catalog free of digital rights management (DRM) restrictions.



Article Link: Amazon Undercuts iTunes With 69-Cent Pricing on New Release MP3s

 

[LethalWolfe]

I'm not sure at what price point predatory pricing becomes an issue, but I would think that Amazon may have crossed that line.

Predatory pricing becomes an issue for Amazon after it dominates the market place and sets its prices significantly lower than the competition in an attempt to drive them out of business. So, let Amazon capture 70% or 80% more of the legal music download market and then maybe bring up predatory pricing.

If Amazon is selling music at a loss per song, then the FTC might have a say about that.

Has no one in this thread heard of a 'loss leader' before? Movie tickets at a theater? Loss leader. Gas from a gas station? Loss leader. Anything on sale (especially Black Friday)? Loss leader. iTunes Store? Yup, some loss leading going on there too.

Link

"We would like to break even/make a little bit of money but it's not a money maker," he said, candidly.
.
.
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When the conversation turned to rivals such as eTunes and Napster, Jobs said: "They don't make iPods, so they don't have a related business where they do [make money]".

Link

iTunes' big studio deal announced yesterday? It's going to be an expensive one for Steve Jobs who's taking a loss on each film sold. Some terms from the WSJ: Apple (APPL) is paying $16 to the studios for each new release, and will sell the films to consumers for $14.99.

Lethal

 

[Slim02]

I believe that Amazon uses 256 kbps variable bit rate compression for their MP3 Download store. Why MP3? The reason is simple: it allows maximum compatibility with all music players that can play back MP3 files out there. Sure, Amazon could use the AAC 256 kbps VBR format, but outside of the iPod support for the AAC format is iffy at best (only the higher end players from Sandisk's Sansa line and Creative support AAC).

I guessing you been living under a rock.. Because my Truck CD Player plays AAC, PS3, Xbox360, PSP, DSi, 3DS, my wife and daughter's Android phone all play AAC.. The list can go on... Google is your friend....

 

[LemonsofDeath]

Almost every song Ive come across on iTunes that costs 1.29 is the musical equivalent of a Michael bay movie.

Also I wish someone besides apple would sell songs in something besides mp3, these days we should be able to download the wav file and convert it to whatever we want.