Amazon’s Daily Deal aims to take customers, market share from iTunes

By on Dec 14, 2010 at 3:31 AM
Audio December 14, 2010

A recent report filed by Reuters aims to shed some light on how online retail giant Amazon plans to commandeer market share of digital-music downloads from Apple’s iTunes Music Store. The current state of music downloads in the U.S. has AmazonMP3 with a 1.3% market share, while Apple’s iTunes holds a 26.7% share. To try and narrow this market gap, Amazon is doing what it does best: deep discounting. The online retailer’s Daily Deal has been a huge success in boosting sales. Recently, the company offered Kanye West’s new album — My Beautiful Dark Twisted Fantasy — for $3.99 on its release date. Amazon reportedly sold 59,000 digital copies of the new album, while iTunes sold 163,000. The less than 3 to 1 gap in sales is notably impressive.

Not everyone thinks the strategy can succeed. A “senior major-label distribution executive” was quoted as saying, “Amazon is growing, but they are growing in millimeters,” and went on to speculate that the strategy “doesn’t seem scalable.”

Amazon does have a broader price advantage over Apple as new tracks sell for 99-cents on the company’s site; new tracks in iTunes sell for $1.29. Amazon also has 100 albums on-sale for $5 every month. What digital music store are you using?

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27 Comments

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  • Mofo

    iTunes FTW. It’s made by apple so u know it’s the best.

    And first!!

    Suck it mofos.

  • Ohmybidness

    How exactly is iTunes the best? You are paying more, and getting non standard content. With Amazon, your getting a standard, non-DRMed MP3, able to be played in more then just iPlayers. Cheaper more accessible content should win out eventually..

    • Neoprimal

      Don’t drink the Troll® Kool Aid Ohmy.

  • http://twitter.com/stalkbrandon Brandon V. Fletcher

    Old news. Amazon has been discounting albums for years. They had DRM free music at 392 kbps for before itunes. Most albums are $5-$8 on amazon. They also have software that automatically adds your amazon downloads to your iTunes library. Its just one of those situation when people don’t realize there is an alternative to Apple. I still use itunes to listen to music though.

    • Radio

      392 kbps?!

  • DavidB

    With all the Kindle’s they are supposedly selling, the ability to play their downloaded MP3′s on Kindle would have helped a bunch with sales.

  • Jayhammy

    Amazon FTW. I try not to give any more money to Apple than I have to.

  • Yep

    I will be using amazon from now on, I think a lot of people just don’t realize amazon mp3 has the same albums for cheaper.

  • Xian

    @Yep, I do think a lot of people realise Amazon sells mps, yet even more people realise if you’re outside the USA you CAN’T BUY THEM!

    • http://twitter.com/robertholsman Robert Holsman

      Yes you can. I live in the UK and i can buy them just fine

  • http://twitter.com/PCPrime Ben Uecker

    I have been using Amazon for my online music purchases for over a year now. While only slightly cheaper, I really like there $5 specials.

    I also use iTunes for my music playing but I don’t buy any music through apple.

  • sirpaul

    I don’t use any. If I ever buy an album (from real artists like Josh Groban, Celine Dion etc…albums which are good throughout) I buy the physical CD. I love the newer pop music as well, but usually 2 songs per album. Not worth buying. And $1 per song is way too much. At least with the CD I can pop it into my cars CD player, or let someone else who isn’t into the whole mp3 playback deal (ie. mom) use it in a normal CD player. And of course I’d also rip it into iTunes to sync with my phone.

    Even when I finish school and become mega-rich, I still won’t buy music for this price. It only encourages artists to make crappy music, and stores like iTunes to charge huge amounts of money for them.

  • http://twitter.com/robertholsman Robert Holsman

    Amazon nowadays, I have no use for iTunes anymore. I’ve bought about a couple of dozen albums off iTunes in the past without thinking that in the future i might not want an iPod; now I’m faced with burning them onto CD and re-ripping them just to get them onto my phone! Amazon doesn’t lock me into a device, and I think that while that might not be a problem for many right now, in the next few years it might be a real issue for other people. iTunes DRM locks you into staying with i-devices.

  • Denise L

    I always use Amazon because I like sampling new music and they always have great deals. The $5 albums are a great deal and it automatically gets added to my iTunes anyway, so I can have the best of both worlds.

  • Vbjedimaster

    Amazon. Great deals, better quality sound, and a universal file format in MP3. Been using them 90% of the time for years now.

    Oh and BTW I am a die hard iPhone user. An Amazon MP3 store iPhone app would be … Awwwweeesome!

    • http://twitter.com/ryanpinney Ryan Pinney

      You have to be deaf to believe that 256 kbs MP3 sounds better than 256 kbs MP4. That’s one way that iTunes has Amazon beat: sound quality. Either way you’re better off getting music on CD or vinyl.

      • jim davis

        That’s total crap. 256 kbps MP3 are virtually indistinguishable from uncompressed CD. When you add in the fact that most people don’t have the audiophile setup (or the hearing sensitivity) required to distinguish the subtle differences, there is no practical reason for dissing MP3. Take off the fanboy blinders and actually listen.

      • DavidB

        Dude, if you truly BELIEVE a 256k MP3 is “virtually indistinguishable from uncompressed CD”, you need your hearing checked. Okay, granted, on craptastic cell phones or even on practically any high end smartphone or iPod you’re probably right, but via a quality audio system with quality DAC’s, there’s a WORLD of audible difference you’re missing…

    • sirpaul

      BlackBerry just got one.

  • joshie

    I use Amazon MP3 pretty much exclusively. I don’t have a Mac, iPhone or iPod though.

    Well I do have an old MacBook, but I don’t use it.

  • http://twitter.com/OffMyNutzSheesh OffMyNutzSheesh

    damn i wish i knew that they sold kanye album for 5.99 i spent 14 at stupid itunes and my ipod broke yesterday so am stuck. amazon from here on out screw apple

  • Konklifer

    Amazon, for the reasons already mentioned. Stil luse iTunes and iPhone but don’t buy any music from Apple.

  • B Brown2232

    It’s all about promo like via Twitter artist promote their albums being on iTunes so their big supporters are gonna go there n buy and ads as well u go on blogs you will see an ad for the album and it’ll say click here to buy which is iTunes…amazon will have to get artist involved in stepping up

  • kwaping

    I’m all about Amazon’s music service. They initially hooked me with their DRM-free music, and they keep me with their daily deals and TONS of free music. I literally check their music store every day to see what the deal of the day is. I also unofficially evangalize Amazon’s music service everywhere I go. I’m their dream customer. :)

  • mcv007

    Amazon foe shizzle!!! Apple is a ripoff!

  • Anonymous

    What digital music store are you using?

    The Pirate Bay….they have the lowest prices around

  • Anonymous

    If the price is the same I buy from iTunes but I check around and if it’s cheaper anywhere else I buy from them. Come to think of it, that was LaLa before Apple shut them down.

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