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

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 Seattle online company is now pricing select top-selling tunes for 69 cents, down from 89 cents previously. Many of the songs in Amazon's 69-cent store sell for $1.29 on iTunes, including Katy Perry's "E.T.", Jennifer Lopez's "On the Floor" and Lady Gaga's "Born This Way."

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.

Top Rated Comments

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76 months ago

You like lossy compression? How 1990's of you.

iTunes is lossy too :rolleyes:

Edit: And glad to see someone downrated me for stating a fact. Real mature.
Rating: 13 Votes
76 months ago
Anyone arguing against this is an idiot.

First people complain about not having choices or prices being too high. Now there are more options and pricing is lower.

Wow. Just wow.

Well those addicted to Apple can still pay more for their songs. Enjoy. I won't stop you. Just like those that want to pay more for ebooks.

Personally - I'll shop it around and pay the best price whoever is selling it.
Rating: 12 Votes
76 months ago
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.
Rating: 8 Votes
76 months ago

Can you name a few more? I have only seen Sony support AAC on their PMP devices.

I don't understand why people still call AAC a "proprietary Apple format" in 2011. It's not even from Apple.

Screenshots in Mac OS X are saved as 32-bit PNGs, yet I've never heard anyone call PNG an "Apple format".
Rating: 7 Votes
76 months ago
CDs are generally around $10-$13 in stores. Downloads at roughly the same price are a rip(10+ songs per CD). $.69 is right for me. Hello, Amazon.
Rating: 6 Votes
76 months ago

Come on! We all know that the TRUE Apple fans on here will gladly pay $1.29 or even 2-3x that to support Steve Jobs' organ transplant fund. They wouldn't go to Amazon even if they were giving away that music for free. :D

Criticism of fanboyism and the habits of consumers is one thing, but it's pretty awful to make fun of the needs of someone who needed such an extreme procedure due to advanced cancer. Very very trashy. :mad:
Rating: 6 Votes
76 months ago
Oh good. I like lower prices.

When I buy music, I typically buy from Amazon anyway. Their prices almost always seem to be cheaper than iTunes for the music I buy.

/would not buy or listen to anything by the artists listed in the above article. Just sayin' :p
Rating: 5 Votes
76 months ago

The artists must be thrilled :rolleyes:

Welcome to the 21st century.
Artist don't make money off of downloads, they make it off of touring and selling all the promotional swag.

The old days they toured to support the album.
Today the album supports the tour. That's where the real money is made now.
I see this as a win for the artist if chopping .30 off of a download can get their music in front of more fans and more potential concert ticket buyers.
Rating: 4 Votes
76 months ago

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.

So are you saying that it would *not* look anti-competitive to you if the company already holding the lion's share of the market was on the receiving end of a generous price cut?

Who says Amazon is getting a better deal from the labels anyway? They could just be selling the tracks as loss leaders to drive more people to Amazon. The same basic approach helped turn Walmart into the biggest brick and mortar store in the world. Like I said before, loss leading is a common and legal retail tactic.

Rating: 4 Votes
76 months ago

I say that it's not wise to just lower prices if you're going to lose money on every sale.

Selling loss leaders is a very common retail tactic and is used by just about everyone (including Apple).

Rating: 4 Votes

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