Amazon Almost Giving Away Lady Gaga's New Album
It's not free, but it's close: Amazon is selling digital downloads of “Born This Way,” Lady Gaga's newest album, for 99 cents. — That gets you 14 songs and a digital booklet. The same album goes for $11.99 at Apple's iTunes …
Context & Ripple Effects
This is the escalation of a price war Amazon started weeks earlier with its 69-cent MP3 store for top-selling singles in April 2011 — now aimed at a full album rather than a single. Pricing a marquee release at 99 cents against Apple's $11.99 turns the download from a product into an acquisition tool.
The backdrop is a decade-long slide toward near-free recorded music: iTunes standardized 99-cent tracks back in its 2007 iTunes Plus catalog, Radiohead experimented with giving music away the same year, and now a major-label release is effectively priced like one song. That PC Magazine picked up the story within a day shows how far the stunt traveled beyond tech press.
First-order effects
- Buyers get Lady Gaga's 14-song 'Born This Way' for 99 cents instead of the $11.99 iTunes charge, and Amazon absorbs whatever gap exists between that price and its wholesale cost on every copy sold during the promotion.
- Apple's iTunes storefront is directly undercut on the year's biggest release, forcing it either to match a loss-leader price it has never operated at or cede first-week download volume to a rival.
Second-order effects
- Labels gain a new bargaining chip: a hot release can be dangled to competing retailers as subsidized promotion, letting Amazon and Apple bid down the consumer price while the label's revenue stays intact.
- If Amazon repeats the tactic beyond this album, Apple's uniform per-track pricing model — unchanged since 2007 — becomes untenable, pressuring iTunes toward promotional pricing of its own.
Third-order effects
- Recorded music drifts further toward being marketing spend rather than merchandise: retailers treat hit albums as customer-acquisition costs, and the sticker price of music decouples entirely from its economic value.
- The pattern points to digital music retail consolidating around players who can afford to lose money on content — storefronts as loss leaders for hardware, services, or broader commerce.
The trend: Digital music pricing is shifting from per-track parity toward retailer-subsidized loss leaders, as Amazon and Apple fight for control of the download storefront.