Amazon's “AutoRip”
Amazon is today introducing a new service called Amazon AutoRip, which automatically gives customers free MP3 versions of any CDs they've purchased from Amazon since the launch of its Music Store back in 1998.
Context & Ripple Effects
Amazon had spent 2007–08 building a DRM-free MP3 catalog, including its planned DRM-free MP3 launch and Sony-BMG joining the DRM-free roster. AutoRip applies that digital catalog strategy to customers' physical-CD purchase history.
By attaching downloadable files to CDs bought as far back as 1998, Amazon makes its music-store account a record of ownership rather than only a checkout channel.
First-order effects
- Amazon CD customers receive eligible MP3 copies without repurchasing the music, expanding the usable value of prior purchases.
- Amazon gains a stronger reason for music buyers to make future CD purchases through its store, where purchase history can unlock a digital library.
Second-order effects
- Retailers selling the same CDs without a linked digital entitlement face a weaker proposition for customers who want both a physical disc and portable files.
- Music labels and Amazon must treat the CD sale and its MP3 counterpart as a combined customer offer, rather than separate transactions.
Third-order effects
- If retailers extend this model, recorded-music ownership shifts toward account-linked libraries that can bridge formats, making the merchant's purchase history a more important competitive asset.
The trend: AutoRip is an early example of digital library migration, in which physical-media purchases acquire account-based digital access.