Month: October

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In 2008, Amazon has made several deals to help further itself as a download service for digital music. They signed up Pepsi to offer redeemable codes for downloads and other merch at Amazon, as well as making a deal with Rockstar Games to allow players to tag songs from the soundtrack while playing Grand Theft Auto IV to download off Amazon at a later time. Now, Amazon has made two new moves. It is now the digital music sales provider behind MySpace Music and is also the mobile music vendor for Google's new Android mobile phone platform. These are important moves and Amazon has come a long way, but it is still far behind Apple and not yet a threat to iTunes. At the end of 2008, Amazon will have sold 130 million songs, compared to the 2.4 billion songs expected to be sold off iTunes. It is expected for Amazon's sales to surge 60%, up to 208 million in 2009 if they continue to make such deals. Amazon also has the backing of the industry in the sense that everyone is looking for something to seriously compete with Apple's iTunes to have leverage in digital music sales. Other companies like to partner with Amazon because it has DRM-free digital music, unparalleled ecommerce research, providing affiliates with 20% of the revenue from any song purchase (compared to Apple's 5%), and also there is Amazon's Web Services developer program. Its designed to integrate its commerce features with a given site without requiring users to navigate to Amazon's site. Execs say that all the ingredients are there for Amazon to drive rapid expansion.

Month: June

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The main competitors for Apple in the realm of digital music all meet the prerequisites for existing customers, flexible pricing and business models, and willingness to invest in new technologies. The key problem that Amazon, Napster, and Wal-Mart have in their efforts to compete with Apple is their marketing. Especially with TV ads, these three companies seem to have non-existent promotional strategies for their DRM-free digital music services. Apple has spent $400 million since 2003 on their successful iPod + iTunes TV ads, along with more on billboard and print ads. Napster has cut down advertising costs since their Super Bowl ad due to low quarterly earnings in an effort to cut their net loss. Amazon and Wal-Mart, who both had billions in revenue last year, have still shown next to no advertising for their services. Amazon has a lone ad with Pepsi that advertises a point system where consumers can purchase anything from Amazon with Pepsi points, not just music, that has been running since February. Amazon's system is also still in the beta format, so it could be waiting for a broadening of its service. Wal-Mart has not advertised their service at all and has been in the midst of a transition to the DRM-free model with the addition of WMG content. It is possible there are campaigns waiting in the wings for these companies, but nothing has come about as of yet. A group effort from these companies and labels alike will be necessary to compete with Apple's chokehold on the digital music world. DRM-free music service-providing companies need to increase their messaging and record labels need to make artists available for promotional purposes in these new marketing campaigns.

Month: January

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Amazon MP3 is currently the only online retailer that offers DRM-free MP3s from all four major international record companies and more than 33,000 independent labels. Now downloads in the MP3 format are playable on almost any personal digital music device.

Month: December

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An overview of current sales trends within the MP3 format. Sony/BMG and WMG are now starting to consider releasing their catalogues in digital format. The article also examines new promotions such as the upcoming Pepsi/Amazon promotion