Amazon is buying "Born This Way" at the full wholesale price, around $9, from Lady Gaga's recorded-music distributor, Vivendi SA's Universal Music Group, according to people familiar with the matter.
Assume 100,000 people purchase that, it's a loss of $800,000.
$800,000 is a small price for Amazon to pay for getting awareness for their new music service. Unfortunately, they got a ******* of negative press instead. Trust me, these multi-billion dollar tech companies can afford quite a bit more than the dying music industry companies can.
EDIT: This is only partly true, since as shown in that snippet, UMG is owned by Vivendi which is a massive technology conglomerate.
Amazon is making so much money off the 99 cent promotion it's shameful. What they did is called in on-line sales terms is a "halo". A halo is: I'll offer you something you want cheap. You come to my on-line site buy it and while your on my site you'll probably by some other items at regular price. The practice started a few years ago when Amazon sold Amy Winehouse's "Back to Black" really cheap. The sales figures later revealed Amazon made huge profits doing it. It's becoming common practice now. I bet other artist are watching and will do the same if it works out for Gaga. Also Amazon got free publicity when it sold a new release for 99 cents. Never been tried before. Amazon did not expect that high a demand for Gaga's CD - their computer's crashed. That also is first for Amazon.
Bad move on them. Not only did they allegedly make a $800,000 loss, but if the system was better, easier to work with, they could of have future buyers. But because people were complaining how it's taking hours/days for their album to arrive, they're going to take this 99¢ experience as a lesson.
Now people can stop saying this was "Lady Gaga" being desperate or "cheap".
I doubt people would stop saying that about GAGA because not many people know that Amazon sell it at a huge loss. They probably think GAGA has something to do with the $1 sale.
Look at the Pulse board for the HITS 5-30/31: GAGA #1 (750k-1m+) thread.
I doubt people would stop saying that about GAGA because not many people know that Amazon sell it at a huge loss. They probably think GAGA has something to do with the $1 sale.
Look at the Pulse board for the HITS 5-30/31: GAGA #1 (750k-1m+) thread.
Lady Gaga's label and management have stated that they were not alerted to or involved in Amazon's promotion.
While it's unclear if another day of the 99 cent "Born This Way" promotion on Amazon.com is truly the online retailer's attempt at making amends for technical problems earlier in the week or just boosting its new Cloud service -- or both -- one thing is certain: Gaga will continue to own this week's headlines.
Although we weren’t aware of Amazon’s deal that they were offering, I applaud them for their efforts. Anytime we can get people to purchase music legally, it’s a good thing for the business. I’m sure they’ll be better prepared the next time they do such an offering.
She has nothing to do with those things.