How Amazon Can Afford To Lose Money Selling Music plus Why Facebook & Google Won’t
Amazon offers some hit albums for $3.99 – $5.00. Right, some of this special sales will be subsidized by labels in order to promote their stuff, but often Amazon sells downloads at a loss. I don’t want to dwell on the fact that the bigot retailer there is devaluates music on a broad scale just to generate traffic and sell other stuff they earn better money with. Which means Amazon is degrading music to a level below candy bars at the supermarket queue.
And why will Facebook or Google with its pending music services not be able to follow Amazon’s lead (which actually seems a good thing in this context)?
Check this numbers – Amazon is generating $189 per unique user while Google search generates just $24 per user. Facebook is only generating $4 per user though that is expected to grow. Still this leaves no headroom for selling music at a loss.