Going ‘Gaga’ for 99 cent album – Amazon’s cloud service promotion

Her music is shallow. A Madonna acolyte who thrives on controversy and shock factor, muffled beneath layers of techno beat. Her stage name is even obnoxious.

So, when I purchased Lady Gaga’s new album, Born This Way, on Amazon, I felt dirty. Like a wine connoisseur who grabbed an oversized juice box off the shelf at Walgreens because it was free with the purchase of a tube of toothpaste. I placed a notepad over the Mae album on my desk. It didn’t need to see this. I hesitantly clicked the purchase button. Then I wondered…

Is there any album I wouldn’t buy for 99 cents?

 

I spent a dollar on a Dr. Pepper out of a vending machine for lunch earlier that day. To get 14 tracks for the same price seemed like a deal too good to pass up. So what if Gaga is a shallow pop star? On the right occasion, I might need some club music. The “Born This Way” single isn’t terrible, and that fingernails-on-a-chalkboard “JOO-DAHS!” refrain in her latest single would make for an awfully entertaining sound effect or ringtone.

So, for one cent less than the soda that lasted until 2 o’clock that afternoon, I got an album that, for better or worse, I can keep forever.

That, “why not?” logic is exactly what Amazon was counting on when they offered the unprecedented discount on the day of the album’s release. The online sales giant has been in the digital music business for a while, but always lagging behind Apple’s iTunes, despite typically boasting lower prices. But with the next great innovation in digital music coming, Amazon made an aggressive play they hope turns the tide in their favor.

The massive discount on Gaga’s album was about more than driving traffic to Amazon’s mp3 site – it was about driving traffic to the cloud. Folks who dropped a dollar on Born This Way were also introduced to Amazon’s Cloud Player – an online storage and playback tool for music libraries (or any other files, for that matter). While Amazon offers 4GB of storage space to anyone with an Amazon account, Gaga downloaders received a free 20GB upgrade for one year. Born This Way, just like any other Amazon mp3, doesn’t count toward that storage quota.

It was an advance strike on Apple, whose iCloud was unveiled earlier this month. Amazon’s hope was that consumers would adopt their cloud player before Apple’s hit the market.

Amazon certainly attracted customers. The site sold 443,000 copies of Born This Way in two days. But what about the cloud? Of those 443,000 users who purchased the album (and presumably even more users who were browsing and buying other songs in the same time period), 150,000 utilized the free cloud player. That was a 60% increase in unique visitors. Still, a peak of 400,000 users in a world of 80 million Pandora users and (updated as of this week) 750 million Facebook users means that Amazon still has a long way to go to cement its cloud player as a legitimate Internet commodity.

And then there were the technical problems.

While a quick Google search for “Amazon” and “Lady Gaga” will produce a decent number of the positive stories Amazon was hoping for, it will produce far more documenting Amazon’s overloaded servers and tales of frustrated customers unable to download their music. On a day all about unveiling new technology that encourages users to store their music online, the cloud held everyone’s music hostage. Only time will tell if the new users will return to Amazon’s cloud service, or if the one-day fiasco was enough to send them crawling back to the feet of Steve Jobs, begging for the iCloud.

I haven’t touched the cloud player since I downloaded the Lady Gaga album. It’s a useful idea, but have yet to have the need to play any of my songs remotely. What Amazon probably appreciates more, is that I also bought a Mumford and Sons CD that day (also on sale, for $5).

Amazon will need my $5 – and plenty more – to pay for the marketing power play. Unlike some album debut discounts, in which the product is offered to vendors at a lesser rate in order to encourage lower prices and thus, inflated sales numbers for the Billboard charts, Amazon paid Universal $8.40 per digital album sale – same as iTunes, who charged $11.99 for the digital download. With 443,000 copies sold, minus the 99-cent price tag, that’s a whopping $3.3 million loss for Amazon.

While the effectiveness of the promotion for Amazon can be debated, there is no doubt that Lady Gaga won the day. Those Amazon downloads were part of a record 662,000 digital sales, and 1.1 million overall sales in Born This Way‘s opening week, according to Neilsen Soundscan. It was the biggest debut since 50 Cent’s The Massacre in 2005, and it temporarily halted soulful sensation Adele’s record run at No. 1 on the Billboard 200. To put the mega sales week in perspective, The New York Times’ Ben Sisario noted that Gaga outsold the next 42 albums on the chart… combined.

It was excellent exposure for someone who has already achieved pop-superstardom, but aims for the rarefied cultural impact of a Madonna or Michael Jackson. And it cost the record label nothing, since Amazon ponied up the full price for the album copies.

And I contend that it was a keen marketing move for Amazon, as well. The $3 million price tag was steep, but it produced a story that continued online for days into weeks. Lady Gaga was already guaranteed to be one of the most talked about people of the week, and Amazon was inexorably mentioned in the same breath (I Tweeted about both parties, and shared about the experience via the always influential word of mouth). And while I tend to believe that the cloud player aspect of the promotion will fail to be a significant factor in the upcoming cloud wars, I do imagine the sale attracted the casual online shopper – the one who only knows about iTunes – to an alternative that is often cheaper and always more compatible.

iTunes, if you plan to follow suit to celebrate the release of iCloud, I’ll buy anything for 99 cents. Just don’t go Beiber – I would like to be able to face myself in the mirror the next morning.

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3 thoughts on “Going ‘Gaga’ for 99 cent album – Amazon’s cloud service promotion”

  1. I had been wondering about Amazon’s cloud service. Thanks for sharing your experience! I enjoyed the cost effectiveness breakdown of the Gaga-Amazon monster. I’m always wondering how much we get ripped on the downloads and how much the company actually spends doing promotions. Very informative!
    Also, I’m glad I’m not the only anti-meat dress music fan out there. Good choice on the Mumford and Sons. Hit me up on FB and let me know who that band was that you were telling me about the other night.

  2. Only time will tell if the new users will return to Amazon’s cloud service, or if the one-day fiasco was enough to send them crawling back to the feet of Steve Jobs, begging for the iCloud.

    The great thing about iCloud is that it is basically just a background process that will keep the devices we’re already familiar with in sync. Less of an “Oh crap, I need to learn how to use yet another interface” user experience.

  3. Lady GaGa and Amazon teamed up for a coming out and come back gig that seems to have worked for both.

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