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Priced This Way: Amazon Flogs GaGa At $0.99, iTunes $11.99

By Oonagh Reidy | Wednesday | 25/05/2011

Death to iTunes? A massive music battle is underway - and its not between the artists.

Click to enlarge
Amazon has come out with an all guns blazing, death to iTunes strategy, pricing Lady GaGa's new album at its digital download music market place at a measly $0.99 on Monday last, the first day of sale.

The same release was priced at $11.99 on its rival iTunes, who despite the cut ptice bi its music rival also reported brisk trading on what is tipped as one of the biggest releases of the year by possibly one of the most controversial sensations of the 21st century.

One music industry sources indicated first day sales fell in the 250,000 - 350,000 bracket between the two download retailers. 

E-tailing powerhouse Amazon is also pricing the album at a massively competitive $6.99 thereafter - well below the wholesale price of around $9, the WSJ believes.

It is also selling many other titles by Katy Perry and Arcade Fire at $5 a pop.

However, although iTunes accounts for 70 per cent of music downloads in the States alone, it must also be remembered mass retailer Amazon.com is one of the most visited sites worldwide including Australia, thus can attract eyeballs to cause Apple some headaches.

But it wasn't just the latter that Amazon's Lady GaGa loss leader strategy has caused issues for.

Its own servers crashed as a result of the cut priced album sending fans in to a frenzy to snap up the deal.

"We have been experiencing high volume and downloads of today's Deal of the Day, 'Lady Gaga, Born This Way,' have been delayed," the company announced in a statement on Monday.

 "All customers who order this album today will get the full  album for $0.99."

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