Lady Gaga's Born This Way may go platinum, but it cost Amazon $3.18 million over two days

Categories: Music News

lady gaga born this way.jpeg
Last Monday, Amazon decided to give away Lady Gaga's new album, Born This Way for just 99 cents. The sale was so popular it brought the site down, and so the site repeated the same promotion on Thursday. That's all well and good for cheapskate Gaga fans, but it reportedly ended up costing Amazon about $3.18 million to run the promotion.

Billboard has a full breakdown of the numbers, but it can be summed up pretty easily: Amazon sold 430,000 copies and lost about $7.40 on each one, thus equaling around $3.18 million. One thing of note, Amazon is probably still losing money based on Billboards calculations, as the record is currently listed at $6.99.

While that's a heck of loss to take, the promotion is actually working magic on a number of different fronts: First off, Born This Way is projected to come in somewhere in the vicinity of 1.15 million first week sales, and it has already topped the charts in the UK with 215,000 units.

It wasn't just about Gaga though -- it was Amazon picking one big release to supplement the cost, so they could get news about their new Cloud Player into the hands and minds of 430,000 people. This certainly isn't the first time we've seen Amazon bite the bullet to get new customers; the site offered similar deals for Kanye West and Arcade Fire last year. And those were just to get people into the groove of buying MP3s from Amazon. This is something a whole lot bigger.

The reason is simple: There is a Yukon-style gold rush for cloud music storage right now, and whoever gets their pick in the rock first wins. Amazon had the first strike with its Cloud Player, which allows users to store their MP3s on its servers so they can be accessed anywhere, but Google's Music Beta just launched as an invite only program and Apple is introducing its iCloud on June 6. Basically there are about to three different carts in the gold mine.

They all, at least on the surface and based on the rumors, are exactly the same, with the same limited functionality and storage models. But it's not so much about which one works the best, it's about which one gets adapted by more people first. As we saw with the iPod and iTunes, it's certainly not about functionality, so much as it is about carpeting the market.

While Amazon might have lost $3.2 million on paper, it probably introduced at least half of the people behind those 430,000 sales to its MP3 service and, subsequently, its Cloud Player. If people take the 95 or so hours to upload their music to a cloud, chances are they aren't going to be willing to do it a second time. Amazon bet on Gaga to bring in new people, and only time will tell if it was worth it. It most certainly was for Gag, who just walked away with a giant pile of cash for doing absolutely nothing.

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guest
guest

this is sad: this promotion may cause sales of this unlistenable pile of shit record to exceed those of really great records that have sold millions of copies becasue they were good, not cheap.  once again the presence of lady gaga in music disgraces the real musicians that have come before her and will come after here.  not too mention shes now hacking away at the custom chopper scene.  come down to our shop gaga and talk bikes.  fucking poser  i guarantee she wont be riding on the back of any bikes, maybe dragging behind a couple.

Ianomusic
Ianomusic

The thing is: everyone already uses youtube as a cloud player. Type a song in there and you get a bunch of fan-created 'videos' using still images. Why doesn't youtube/google just convert slightly to youtube audio and add the function of having an audio player that doesn't need a video to accompany it. Then have links to purchase the song from the label, artist, and online market. I don't know why youtube hasn't done this. I downloaded the amazon cloud a few weeks ago when I bought Paul Simon's album from them. It is fine but offers nothing new. People don't need or want their own online storage, they just want the song they are thinking of to be instantly searchable and listenable. Thoughts?

Thorin
Thorin

If you have an Android phone, there actually is an incredibly cool App that basically converts YouTube into a cloud player: http://ghosttownapp.com/

I agree to an extent, but I do think some people are going to gravitate toward the storage model and others to the streaming model. Basically it'll boil down to the difference between people that like to listen to the radio and the ones that would buy it on CD/Cassette/Vinyl. Both types can/should co-exist, I'd think. 

jbean
jbean

Cheapskate fans? FUCK YOU THORIN! YOU JUDGEMENTAL PIECE OF SHIT! times are tough right now, if someone can get an awesome deal, WHY SHOULDN'T THEY? I'd love for your ass to be fired, let your bank account tank, and then try to call someone cheap! I'm tired of pretentious assholes getting paid for their bloated, high horsed opinions.

AndyThomas
AndyThomas

Yeah, Thorin! Just wait til Westword fires you for pissing off an anonymous blog poster and you're forced to live without the millions they pay you! You will be ruined! muwuahahah! 

Guest
Guest

lol, "cost a company"? Amazon made this their own debt. And plus, it's a business decision. An investment. It's essentially the same as investing in stocks. You don't know for sure if that stock will go up or down. If you weigh the probabilities correctly, you will earn money, but you will have to sacrifice some money in the first place to ever get that money.

Guest
Guest

lol I like Gaga but ...

she just cost a single company more than most artists will ever make in their whole career

successful? welcome to the machine

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