Is Apple Finally Worried About Amazon’s Music Store?

Published on March 2, 2010
by Peter Kafka

Amazon’s MP3 store hasn’t done much to weaken Apple’s grip on the digital music business. But that doesn’t mean Apple isn’t paying attention.

Big music label folks say Apple (AAPL) has long complained about their involvement with Amazon (AMZN).┬áBut recently, Billboard reports, those complaints have become more specific. The trade magazine says Apple is asking the labels not to push new releases via Amazon’s “Daily Deal” promotion, which offers new records at cut-rate prices.

Warning! There’s some salty music-label-executive language in this excerpt:

In exchange for a Daily Deal promotion on a new album, Amazon has been asking labels to provide it with a one-day exclusive before street date and such digital marketing support as a banner ad on an artist’s MySpace page and messages on label and artist Web sites and social network feeds.

“When that happened,” [a major-label head of sales] says, “iTunes said, ‘Enough of that shit.'”

Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals.

In response, label executives at Capitol, Capitol Nashville and Jive recently opted against participating in Daily Deal promotions they had been considering for Corinne Bailey Rae’s “The Sea,” Lady Antebellum’s “Need You Now” and Ke$ha’s “Animal,” sources say.

Billboard notes that the labels are still working with Amazon on Daily Deal promotions. But it says they are pulling back on prereleases and exclusives for big records and pushing smaller artists that Apple isn’t likely to shower with promotional support.

Today’s Deal: $3.99 for Sony artist Raheem Devaughn’s new album, which doesn’t appear in iTunes “New and Noteworthy” section.

I’ve asked Amazon, Apple and all four of the big labels–Universal, Sony (SNE), EMI and Warner (WMG)–for comment, but I’m not holding my breath.

But assuming that Billboard is right here–and reporter Ed Christman has been covering music retail forever–it’s interesting to note that Apple is pushing back a bit more forcefully at Amazon. (Industry trade Hits DailyDouble reported something very similar in January).

If I’m Jeff Bezos, I’d take that as a compliment. And then I’d go back to worrying about Steve Jobs’s entry into the e-book market.

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