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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

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May 16, 2008

Bargains and Widgets from Amazon MP3
by David Harrell

Amazon.com mp3 banner

Excuse me if I sound like a total Amazon MP3 fanboy, but -- for a small number of albums -- Amazon is getting very aggressive with its pricing. In addition to its weekly $5 specials (this week's bargains include Zeppelin's Houses of the Holy and the Postal Service's Give Up), Amazon is actually selling a few select mp3 ALBUMS for $1.99! (That's what I just paid for Van Morrison's Astral Weeks.)

My guess is that these ultra-bargain albums are essentially functioning as loss leaders to prime the pump for the MP3 store -- I can't see how Amazon's making money on a $1.99 album download, unless the involved labels are forgoing the usual payout rates. (While the nominal per-track prices at eMusic are similar to Amazon's bargain prices, those figures are somewhat deceiving because eMusic subscribers -- on average -- only use around 50% of their allotted downloads each month. Hence, this "digital breakage" allows eMusic to pay labels, via its revenue sharing agreement, a per-track amount for each download that approaches -- or even exceeds -- the average per-track price that the subscription plans suggest, while keeping a similar amount for itself...)

Amazon also rolled out some mp3 widgets this week that allow web publishers and bloggers to embed any track from Amazon's mp3 catalog on any web page and receive a 10% commission on click-through mp3 purchases:



This could be huge, as it seems like many websites and most blogs already have associate links to Amazon products. If the mp3 widgets are similarly embraced, it means that millions of web pages could soon feature music samples that readers can easily purchase as mp3 files.

After the NPD report came out last month, much was made over the fact that Amazon's initial share of the digital music market hadn't come at the expense of Apple's iTunes store. Some commentators seemed to think that this failure to capture iTunes customers was somehow a major negative for Amazon. But market share is market share, and the existing digital music market is still relatively small. So it doesn't matter if Amazon never poaches a single iTunes customer -- the biggest growth potential for digital downloads comes from consumers who aren't yet purchasing downloads. And it seems like Amazon.com is better positioning itself to capture those consumers by converting its current CD buyers into purchasers of downloads and giving bloggers an incentive (and easy way) to link to Amazon's mp3 catalog.

Apple, of course, has an affiliate program for iTunes and provides a few iTunes widgets. But as far as I can see, the widgets aren't designed for affiliates and are limited to displaying music and video content you've already purchased or reviewed. They're billed as ways to share information with friends and appear to be separate from the affiliates program.

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    THE LAYAWAYS

    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="http://thelayaways.bandcamp.com/album/maybe-next-year">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs


    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.



    album cover art from The Space Between

    <a href="http://thelayaways.bandcamp.com/album/the-space-between">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.



    album cover art from We've Been Lost

    <a href="http://thelayaways.bandcamp.com/album/weve-been-lost">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.



    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website