The subject of the pricing of Taylor Swift’s new album as a digital download on Amazon and iTunes continues to intrigue me.
As Felix Salmon notes, the reason for the initial low price of $3.99 on Amazon, versus the $11.99 you have to pay on iTunes, was probably more a matter of Amazon doing some loss-leading to lure people away from its rival than a tribute to the music industry, as I suggested.
The album has now gone up to $8.99 on Amazon, while the price on iTunes remains the same. The strange thing is that, not only is the product more or less the same on Amazon (and arguably superior since all the music downloads on Amazon come in MP3 format with no digital rights restrictions), but it can be set to place all music in one’s iTunes library.
Despite all of this, most people are still paying a higher price for an inferior product on iTunes because of inertia, ignorance or innate loyalty to Apple.
In fact, anecdotally, many people I talk to do not realise that they can download music just as easily from Amazon as from iTunes. It demonstrates the power of distribution and brand, even in a seamless digital environment where Amazon is a click away from iTunes.
I imagine that Amazon will have to do quite a bit more price discounting to persuade sufficient numbers of people to switch loyalties. So I look forward to buying more cheap music there in future.