In case you missed it, Amazon opted last week to offer Lady Gaga‘s brand new album “Born This Way” as a digital download for $.99. What a deal (I did it!). More than 440,000 people downloaded the album at its special price, but Amazon still paid $8 to $9 each for the album.
After doing the math, Amazon seems to have lost $3 million on the deal. Horrible, right? Well, maybe not. The promotion certainly gave them lots of free press and introduced more people to their cloud-based music player. If you chalk the whole things up to promotion fees, then it actually seems like a pretty savvy move.
Gaga did well from it as well. Figures show that she sold 1.1 million copies of her album last week. That’s an impressive total and one that few artists have ever hit. Still, it’s really misleading. Many of those 440,000 people (like me, for instance) would never have bought her album for full price, but opted to do so because of the Amazon promotion. Her sales figures are quite inflated because of that deal.
Basically, it looks like a great move from the perspective of Gaga and Amazon. Anyone disagree?