Amazon offered Lady Gaga’s new album for $1 yesterday in an apparent bid to challenge Apple’s dominant digital music business with its Cloud Drive and Cloud Player services, but technical glitches may see the strategy backfire.
The deeply discounted offer — the same album in Apple’s iTunes store is $12 — triggered such intense interest from Gaga fans that Amazon’s servers reportedly staggered under the load, with many customers complaining of delayed or partial downloads.
In a Tweet, Amazon promised that all orders would eventually be fulfilled, but if the point of the sale was to impress impress customers with the new cloud services, the company may be disappointed. Though hardly the end of the world for Amazon’s fledgling streaming service, the snafu will make Apple’s user friendly iTunes store look even better by comparison.
Trying to compete on price with Apple may in any case be a fundamentally flawed strategy. The company has a long history of offering premium products that justify their being more expensive than competitors.
Amazon has also set out on the dubious path of selling music while alienating the music industry. Apple, in preparation for its own streaming service, has reportedly struck deals with three major labels to stream music to users who already own copies of the songs without their needing to upload the tracks first. Amazon, on the other hand, launched its streaming service without the record labels’ blessing.
Amazon contends it doesn’t need to pay anything for customers to stream their own music. But this approach means users must laboriously upload their own songs — and pay for more server space if needed — before being able to stream it. The only exception is music bought from Amazon, which can be streamed immediately.
Apple reportedly controls about 90 percent of the digital music market. Despite being the first major online music seller to offer tracks without cumbersome copy protection, Amazon has had little luck in breaking Apple’s domination of the industry. The way it’s approaching its cloud music services suggests why.