Tuesday, December 30, 2008

Amazon mp3s

As AndyC noticed, Amazon UK is strongly promoting its mp3 store. In the US the mp3 store has been running for some time. It is convenient and easy to use. It is clear that the record companies are trying to undercut iTunes by letting Amazon sell mp3s while not allowing Apple to do the same thing (with exceptions). A year ago if I had a craving for a song I would buy it from Apple. Now I will usually buy the song from Amazon to avoid the DRM. Amazon seems to be experimenting with two levels of price point. One is the album for $5 like Tha Carter III or Dear Science. This is a tempting price. But they also are trying albums for $2, which, for the right artist, is almost irresistible. Yesterday you could get Purple Rain and Howlin' Wolf: His Best - Chess 50th Anniversary Collection at this price. Today you cannot. I wonder if Amazon is eating the costs on these experiments in order to determine the price elasticity of demand for mp3s. I also wonder how I can find about these offers without having to check the site every day.

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