Tuesday, March 3, 2009

A letter to Amazon.com



Dear Amazon.com,
Please stop letting the public think that digital music is worth less than it is.

Clearly we understand the difficulty in trying to compete with a monster like iTunes. So how do you try to keep up? You look at what iTunes promotes, then swiftly slash your prices on the exact same featured artists and try to play ball.

Exhibit A: Troubadour, by K'Naan. K'naan was relatively unknown before last week, when his major label debut dropped. iTunes was ahead of the game, making it a free Single of the Week and discounting the album to $7.99 to those who liked it.

You, Amazon, upon learning this, quickly discounted the album to a whopping $1.99. Two dollars! For a whole album! What a deal! If iTunes is selling it for 5 bucks more, I'd be a fool to buy it there, wouldn't I?


Exhibit B: No Line on the Horizon, by U2. Clearly the biggest album dropping this week, and by a long shot. And how does any business drive sales to its products? With great deals, of course! The album is available for just 4 bones on Amazon, compared to 10 at iTunes. And again, why waste the extra cash on iTunes? Seems like a no-brainer if you ask me (that is, if you're a big-enough tool to actually like the most overrated band of all time).




I could list countless examples but you get the point. But, Amazon, I warn you of the long-term repercussions of your actions.

What your customers probably don't realize, is that you are taking a massive hit by offering these albums for so low. The record labels give the same wholesale price to Amazon as they do to iTunes, Best Buy, or whomever -- and when you sell an album for 2 bucks, you're taking $2-3 in the red column with each purchase.

Amazon's logical explanation must be, "if people see these great deals, they'll come back and our customer base will keep growing." And Lord knows it needs to. But these "great deals" can't last forever if you want to stay alive. 2,000 sold K'Naan albums = a $6,000 loss. That will add up after awhile.


Moreover, you are catering to a larger problem: the idea that music is not worth as much as the price for which it is sold. Most people steal all their music these days, and the few that don't are barely willing to pay $10 for a CD. If you keep convincing a customer that an album is worth your $4, your $3, even just $2 -- but not $10 -- how is anybody supposed to profit from album sales? HOW?

Please stop the gimmick, before it's too late. A great album IS worth your $10. Plain and simple.

(I started to use the rest of this space to express my strong dislike for U2 - and specifically, that Pope-wannabe on your left - but I would've written for hours. Besides, I'm all about the love, I keep my Haterade in the fridge. I hope you enjoy whatever album you've bought most recently...especially if it's Troubadour, not No Line on the Horizon.)

2 comments:

Anonymous said...

Pope-wannabe to the left to the left

Most likely Amazon sees music as a loss-leader. Just like grocery stores lose money on soda so that they can make huge profits on soup and other foods the customer buys when they come in after seeing a sale on soda, Amazon is luring the customers in with low music costs. They eat the red numbers, and make money off of all the other products and services they sell while screwing over the little retailers they take advantage of.

Isaac said...

K'naan for two bucks??? THanks DDoff!