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About two months ago, Amazon made a major move into the future by offering a cloud based music server. The service, called Cloud Player, allows you to buy music at Amazon and then listen to it from any computer or Android device. They offer 5GB free storage, if you have an interest in trying it out, and it’s $1 per GB after that.
For once, Amazon has beaten Google and Apple to the punch, and it’s got a major lead on a major development, but because Amazon isn’t known for those services it’s been trying to get the word out.
Enter Gaga.
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Amazon was selling copies of Born This Way, Lady Gaga’s new album, for $0.99 an album. Now, people tend to misread that and see the more typical $0.99 per song, the typical iTunes fee, but no, an entire album for a dollar. Wholesale, Amazon is paying $7 per, so they’re losing $6 for every sale. And there have been a lot of sales, some projecting up to 800,000 this week. Pretty impressive considering they’ve never moved more than 100,000 copies of an album in a week — and that selling at this loss means they’ve lost up to $5 million in the move.
That’s not chump change, not by any standard, but considering that a Super Bowl ad runs about the same, if not more once you factor in all the production costs, this starts to look pretty savvy. Especially considering the goodwill and word-of-mouth this is going to spread. Plus, when you buy the album, you get free 20GB on their Cloud Player, and if only 10% of the people who took advantage of the offer start using the Cloud Player, they will have made the Cloud Player a major success overnight.
Clearly, stunt sales as advertising still work. If you’ve got a new service, normal advertising may not be the strongest route, especially if you’ve got something that could be very popular at the right price point. This is, of course, what Groupon has been doing, but there’s no reason businesses can’t do these things for themselves. Word-of-mouth is still one of the best methods of advertising, and this is a great way to take advantage of it.
