Lady Gaga Sparks Retail War Between Amazon and iTunes With ‘Born This Way’
Lady Gaga‘s ‘Born This Way’ is an enviable piece of music real estate for digital retailers, as Amazon and iTunes employed very different strategies when selling the record, which landed Monday. Most new albums are released on Tuesday of each week, but ‘Born This Way’ is not just any new album. It’s expected to provide a much-needed economic boost to sagging record retailers in both the physical and digital space, much like Taylor Swift‘s ‘Speak Now’ did last year.
According to Oh No They Didn’t, Amazon’s aggressive discount of selling ‘Born This Way’ for just 99 cents on Monday was followed by a $6.99 price thereafter. Much like Best Buy in the early part of the ’00s, that’s a process called loss leading. A retailer that sells tons of other wares is able to operate at a loss when selling music so cheaply, since they will make up for it by selling bigger ticket items. However, some Amazon users were incredibly frustrated on Monday, as an influx of people trying to nab the 99 cent version overwhelmed the services and caused delays. So one could say that ‘Born This Way’ nearly broke the worldwide web.
Apple’s iTunes did not need to employ such a deep discount, selling the record at full price without losing any sales. Amazon looked to increase its profile and profits with its sales measure, if only temporarily.
Both retailers are selling the 22-song deluxe version, at two different prices. Apple is hawking it for $15.99, while Amazon is offering a more affordable $12.99 price point. However, the deluxe is Apple’s top seller, while the cheaper, standard version is selling more briskly at Amazon.
Overall, ‘Born This Way’ is expected to provide a boom in the music industry, and in the end, the entire industry wins, including Amazon and Apple.
Watch the Lady Gaga ‘Born This Way’ Video