14 DAY TRIAL // Music is a cut-throat business online. Few people are making big money out of it, yet the huge potential keeps on attracting more players offering various music related products. One way of making money from music online is by selling it, in fact it's pretty much the only way so far.
Apple's iTunes is doing quite well selling millions of songs while dominating the market. But Amazon has long wanted a bigger slice, its MP3 store only owns about 10 percent of the digital music sales in the US.
One strategy Amazon has tried has simply been to offer the same songs cheaper.
And now it's doubling down on that by going cheaper still, the hottest songs of the moment can be had for 69 cents, a 20 cents drop from the regular price and a full 50 cents below the regular iTunes price of $1.29.
Chart-topping songs of the moment, like Katy Perry's "E.T.", Jennifer Lopez's "On the Floor" and Lady Gaga's "Born This Way" are available at the new low price as well as many others.
It's certainly a bargain price, but it remains to be seen if people can be lured in by price alone. Many people may not even know there are other ways of buying music outside of iTunes and even if they do, the convenience factor is hard to fight against.
Who's taking the hit with this price drop is also a mystery, though, knowing both the major labels and Amazon, it's safe to assume it's the latter.
Amazon has done the same for ebooks to promote its Kindle bookstore and device and it's not hard to imagine the company sacrificing short term profits for market share.
In fact, Amazon said as much in its Q1 financial report, it posted record revenues but also high expenses. The company said it plans to spend a lot to support its emerging businesses in the future as well.