Find solution
How do you promote an album?

How much money did Amazon lose to promote Lady Gaga's album "Born This Way" for $0.99?

  • On Monday, May 23rd, Amazon promoted Lady Gaga's new album "Born This Way" for $0.99 in a one-day offer. How much money did Amazon lose to make this happen?

  • Answer:

    According to this WSJ article http://online.wsj.com/article/SB10001424052702303654804576341910503679694.html Amazon is paying the full $9 wholesale price to Universal Music Group, so it would suggest they are losing about $8 per download. But the bet they are trying to make on digital downloads is much bigger, so this is probably a pretty good investment. Assuming that many of the people who download this today are new to Amazon digital downloads, and that they can convert say 10% of those to buy from Amazon as opposed to iTunes on an ongoing basis, it will be a huge success. This will also give them an audience to market their $0.69 new releases to, as well, which should help them retain them as customers.

Barry Graubart at Quora Visit the source

Was this solution helpful to you?

Other answers

According to the WSJ, Amazon was losing about $8 per transaction, and on the day of the sale the total MP3 downloads by Amazon and iTunes combined were 250k.  If Amazon captured 10%-20% of the market, then it spent between $200k to $400k.   Amazon spent no money on advertising as it relied on its website and twitter to get the word out. So now to add on to your question: was it worth it? Perhaps... I'm sure the promo brought in new users, but the fact that downloads became backlogged definitely did not help Amazon win over long-term customers.  To become a long-term profitable customer, Amazon will need to win via a good customer experience because if it only has users logging in to buy the cheap (subsidized) MP3s, it will never earn a profit from this channel.  I love Amazon (write about them a lot on my blog) and was actually really disappointed when I heard they suffered from download delays the day of their big promo.  I think it was a huge error and they really blew it.

Anthony Lazaro

Related Q & A:

Just Added Q & A:

Find solution

For every problem there is a solution! Proved by Solucija.

  • Got an issue and looking for advice?

  • Ask Solucija to search every corner of the Web for help.

  • Get workable solutions and helpful tips in a moment.

Just ask Solucija about an issue you face and immediately get a list of ready solutions, answers and tips from other Internet users. We always provide the most suitable and complete answer to your question at the top, along with a few good alternatives below.