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Amazon’s Gaga sales boost Cloud

'Born' giveaway draws online users

This week’s 99¢ full-album download sale of Lady Gaga’s new album “Born This Way” by Amazon grabbed headlines. But the true payoff of this how-low-can-you-go rollout may only be apparent down the road. Super-lowball pricing of the coveted title further amplified the online retailer’s trench warfare with download marketshare leader Apple, and opened up another front in the battle.

Amazon’s so-called Gold Box Daily Deal has been a thorn in iTunes’ side for some time. For more than a year, company has placed top new titles on sale at loss-leader prices, which has heightened its market profile and helped thrust some releases up the album chart in the process.

Arcade Fire’s “The Suburbs” benefited from $3.99 one-day pricing on Amazon last August. The album, released by indie Merge Records, blasted onto the chart at No. 1 with a first-week tally of 156,000 units.

The Gaga promotion was aimed at doing more than carving out a larger slice of the download market. Amazon recently announced its Cloud Drive locker, which allows consumers to access music libraries from its centralized storage.

Amazon initially offered 5 gigabytes of free Cloud Drive storage; purchase of any album entitled users to 20 more gigs. By offering Gaga’s heavily promoted set at a price lower than the cost of a single new track at iTunes, Amazon hoped to score a promo coup on iTunes’ still-unlaunched cloud locker service.

Strategy backfired somewhat when Amazon’s servers crashed May 23 due to massive traffic, but May 26’s renewed sale ensured still more purchases — and increased awareness of the company’s Cloud Drive.

Upside for releasing label Interscope is mixed.

Booming Amazon sales will of course guarantee the bow of “Born This Way” at No. 1 on the U.S. album chart, but a chart-topping debut was already an acknowledged fait accompli. It remains to be seen if set will top sales of 1 million its first week.

Interscope reportedly reaps full-price download dollars on this week’s deal; Amazon’s pricing decision was apparently made unilaterally. But a question lingers: Will initial heavy discounting of “Born” impede sales up the line?

Title is being moved, not merely at next to nothing, but for nothing at one major retail outlet: Best Buy, which priced the set at $12.99, is also giving it away with the purchase of a new mobile phone.

After years of industry complaints that illegal downloading (not to mention album giveaways by the likes of Radiohead and Prince) was driving down the perceived value of music, the sale of the year’s most anticipated title at the lowest price in history is not devoid of irony.

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