Uploaded July 2011 | Updated September 2026, 2 weeks ago
What did Amazon hope to gain by offering Lady Gaga's album at a loss? They did it to entice more customers into their Cloud Disk and Cloud Player services. But how to they plan to make money by giving way services?
Some background: while many aspects of Amazon's mp3 deal seem better than what Apple offers on iTunes (better pricing—on many items, no DRM, higher bit-rate), they have failed to eat into Apples share of the market. Most of the gains that Amazon has made come at the expense of smaller players.
Apple's customer retention is built on more than just the purchase of tunes. It includes an extended system of hardware, software and services, where the iTunes software and store, Macs and PCs, and the market crushing trio of iOS products (iPhone, iPad, and iPod Touch).
Apple customers are very comfortable where they are.
Two changes are underway that Amazon hopes to exploit. One is a shift from a PC-centric world to a mobile-centric world. The other is the rapid growth of Google's Android operating system for phones and tablets.
The Android customer base represents an golden opportunity for Amazon to bypass the lock-in that keeps iOS customers tied to the iTunes store.
What did Amazon hope to gain by offering Lady Gaga's album at a loss? They did it to entice more customers into their Cloud Disk and Cloud Player services. But how to they plan to make money by giving way services?
Some background: while many aspects of Amazon's mp3 deal seem better than what Apple offers on iTunes (better pricing—on many items, no DRM, higher bit-rate), they have failed to eat into Apples share of the market. Most of the gains that Amazon has made come at the expense of smaller players.
Apple's customer retention is built on more than just the purchase of tunes. It includes an extended system of hardware, software and services, where the iTunes software and store, Macs and PCs, and the market crushing trio of iOS products (iPhone, iPad, and iPod Touch).
Apple customers are very comfortable where they are.
Two changes are underway that Amazon hopes to exploit. One is a shift from a PC-centric world to a mobile-centric world. The other is the rapid growth of Google's Android operating system for phones and tablets.
The Android customer base represents an golden opportunity for Amazon to bypass the lock-in that keeps iOS customers tied to the iTunes store.
