The Amazon Effect – Lessons Worth Learning

SEATTLE (Hypebot) –Not since Apple has a single company changed the music industry like Amazon did in the last quarter of 2007 and will continue to as we enter 2008.

Amazon's simple strategy was to apply the same consumer driven model that made it the net's top retailer to the music industry. Will Amazon stop file sharing or save the record industry? Certainly not. But Amazon does offer lessons and present opportunities for all of Music 2.0.

What is The Amazon Effect?

  • Major labels would have eventually dropped DRM, but Amazon accelerated changed by giving labels a familiar retail partner and demanding they go DRM-free or be excluded.
  • Apple is now vulnerable. iTunes will still be #1 at the end of 2008, but Amazon proves that alternatives can compete. The iPod may still be the player of choice, but with universal compatibility competing manufactures see a way forward.
  • Fans comes first. The music industry forgot that ultimately it's all about the fan. At Amazon, the consumer is always king. Deep catalog, seamless downloads and one click buying all make paying for music OK again.
  • Be a good partner. Dealing with Amazon is straight forward (and without the usual industry drama) for labels and for consumers.
  • Sell everything. With the addition of all four majors to Amazon's unprecedented indie label offerings, their catalog is deeper than anyone's.
  • Sell everywhere. Amazon.com is still the hub, but through a growing number of partnerships and affiliates, downloads are available everywhere and an important revenue source for web sites
  • Variable pricing. iTunes fought it. Amazon embraced it.
  • Single track downloads still rule, but "album only" is OK too.
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