When Amazon started selling Lady Gaga's album for $US0.99 the other day, there was no doubt it would stand to lose millions. The total today, we now know, is about $US3.2 million. This was still a good move for Amazon.
Why? Well, loss-leader strategis aside, if you're up on Amazon's wheelings and dealings this month, you know that the Cloud Player is still very much in its infancy, Google just launched its own cloud-based music locker, and Apple is rumoured to be all but ready to launch their streaming-based iTunes service at WWDC. That's some serious competition, and what better way to increase awareness than basically give away a sure-fire hit pop album through your MP3 store?
Add on top of that a general increase in awareness of Amazon's overall status as a online retailer and that $US3.2 million ding is undoubtedly music to executives' ears. [Billboard]