Amazon rallies associates to battle Apple's iTunes share

[AppleInsider]

Online retailer Amazon is planning to use its referral system as an edge against Apple's iTunes Store by offering major incentives to sites that link to its MP3 store.

Having begun its existence selling books, Amazon told members of its Associates program on Wednesday that they could earn 20 percent for every referred sale from the company's new MP3 store until the end of 2007. Up to $1.50 from each album or song sold would go to the affiliate, according to a message sent to Amazon's partners.

The move was aimed at providing a jumpstart to Amazon's fledgling direct-download service, which launched in late September with a unique focus on carrying only music without digital rights management (DRM). By providing a more immediate financial reward, the company hoped to see more websites link to songs offered on Amazon MP3 alongside their usual fare -- and potentially, in place of links to competing music stores.

In contrast, Apple's iTunes referral program currently offers 5 percent of each sale to an affiliate, or just one quarter of Amazon's promised share. Normal referrals would still provide double the amount of the Apple store at 10 percent.

Amazon's approach escalates an increasingly direct conflict with Apple for control of the download music business, which started when the former began selling DRM-free songs at 99 cents or less versus Apple's $1.29. Apple responded in mid-October by dropping iTunes Plus prices to a similarly low level.

Apple also challenged Amazon's claim of holding the largest catalog of unprotected music, listing songs from significant independent labels like Sub Pop as well as its existing EMI library. Amazon's store includes some independents but also enjoys the support of Universal Music, which is conducting a trial run of DRM-free songs on several large online stores but has refused the same deal for Apple. Universal recently opted out of long-term contracts with the iTunes operator and is widely reported to be using its experiment as a means of curbing Apple's dominance of online music.

[ View this article at AppleInsider.com ]

[MsNly]

Slow news day...

And its not even technically Thursday yet...

In other news: Microsoft bankrupts and Apple takes over the market with a 99% share.

[SpamSandwich]

I've used both services now, and there are definite advantages to both. Hooray, capitalism!

[MacTel]

Come on Apple. Get mad! Give us the DRM'd music for 89 cents.

[bsenka]

I've used both. I like iTunes better, but Amazon is good enough that easy direct web links that don't require iTunes to be installed will be a huge plus for it.

This referral system has been huge for books with Amazon. Bloggers and news sites of all sorts put links to Amazon right in the text of their articles all the time. They start doing that for music, and Amazon's music store will get very big, very fast. Apple's only defense will be to implement some sort of referral system themselves, AND make the iTunes store accessible directly though the web site in addition to iTunes.

[Rot'nApple]

Originally Posted by MacTel

Come on Apple. Get mad! Give us the DRM'd music for 89 cents.

NO, NO, NO! Not 89 cents...

and

NO, NO, NO! Not Hooray Capitlaism... Apple needs to think Communism!

Apple mark your iTunes song prices at .59 each and albums at 4.99 each and your movies at 2.99 each until Amazon quits and Universal cries foul and crawls back. Oh and the communism part - Nikita Khrushchev once said in reference to capitalism, "My vas pokhoronim!", translated to "We will bury you".

There you go, Steve, your mantra - We will Bury You!

[mcarling]

Originally Posted by Rot'nApple

Nikita Khrushchev once said in reference to capitalism, "My vas pokhoronim!", translated to "We will bury you".

That famous quote was understood in the west as a threat of nuclear annihilation. The correct and intended meaning is and was "We will attend your funeral" i.e. "We will outlive you."

[ncee]

Originally Posted by mcarling

That famous quote was understood in the west as a threat of nuclear annihilation. The correct and intended meaning is and was "We will attend your funeral" i.e. "We will outlive you."

And the "Beat" goes on …

Skip

[eAi]

Originally Posted by bsenka

I've used both. I like iTunes better, but Amazon is good enough that easy direct web links that don't require iTunes to be installed will be a huge plus for it.

This referral system has been huge for books with Amazon. Bloggers and news sites of all sorts put links to Amazon right in the text of their articles all the time. They start doing that for music, and Amazon's music store will get very big, very fast. Apple's only defense will be to implement some sort of referral system themselves, AND make the iTunes store accessible directly though the web site in addition to iTunes.

Did you read the article? It says Apple already have a referral system...

[aaarrrgggh]

Curious how Amazon will have enough margin to support referral fees. Could Universal be giving preferential pricing, or is Amazon willing to do their music store as a loss-leader?

[nagromme]

Anything that keeps both DRM-free services on top of the pack ahead of all the Windows Media DRM nonsense is good in my book. iTunes may not need a boost, but Amazon is new and I'm glad they're pushing for success.

[WJHMH]

I used it last night (thanks for the info from this site) & found a album that was complete rather than the headache of that itunes partial album B.S. Apple, you yet again to lose another sale, thanks Amazon.com

[fraklinc]

I bet el jobso its just laughing his as of as these companies go nuts trying to get back on their feets again, besides the amazon new music store needs some major improvements, a nice start will be listing songs by albums so you wont have to sample them all, I think iTunes its just goin to get better and better, next thing you know el jobso anounces a movie rental service that syncs rentals to iPhone and iPods, and Amazon its back again at square 1. el jobso is a snicky little one he just turn Iphone and iPod touch into 2 iTunes cash cows

[mazzy]

Originally Posted by Rot'nApple

NO, NO, NO! Not 89 cents...

and

NO, NO, NO! Not Hooray Capitlaism... Apple needs to think Communism!

Apple mark your iTunes song prices at .59 each and albums at 4.99 each and your movies at 2.99 each until Amazon quits and Universal cries foul and crawls back. Oh and the communism part - Nikita Khrushchev once said in reference to capitalism, "My vas pokhoronim!", translated to "We will bury you".

There you go, Steve, your mantra - We will Bury You!

They are not gonna sell below costs. The Records companies wanted higher prices.

[caoimhin]

Originally Posted by mazzy

They are not gonna sell below costs. The Records companies wanted higher prices.

.... and surely competition will get you that.

[SpamSandwich]

Originally Posted by WJHMH

I used it last night (thanks for the info from this site) & found a album that was complete rather than the headache of that itunes partial album B.S. Apple, you yet again to lose another sale, thanks Amazon.com

Thank goodness I bought both AAPL and AMZN...

[SpamSandwich]

Yippie-kai-yay Capitalism!

[bsenka]

Originally Posted by eAi

Did you read the article? It says Apple already have a referral system...

It's not the same. You can't link directly to the album sale in one click within the browser.

[kaioslider]

This is all good. The iPod and iTunes has help it attract more customers to the mac platform. It's seemed not matter how amazing Mac OS X was/is compare to windows, it wasn't enough to get people to seriously consider the Mac. The halo effect was real, I've seen it happen, long time PC users buy an iPod, use and Apple app, iTunes, and generate interest on Apple's site. The Mac business now seems to have picked up its own momentum and with leopard and Apple current designs has no reason to fall back. Amazon is the first real competition Apple has for it's iTMS, and the best part is that they could close down the iTMS and still sell tons of iPods. Amazon is leveraging it's strength and I know Apple will work to compete accordingly, all and all it's a win win for iPods and consumers.