Amazon Borrows Play From Napster

Share this content: yesterday ripped a page out of online music swap shop Napster's playbook.

The e-tailer began offering free downloads of songs from recording artists such as Nirvana and David Bowie and said the move would boost sagging CD sales.

Amazon, Seattle, also is letting independent artists offer free, downloadable music and has set up an electronic tip jar so fans can donate money.

Amazon will take 30 percent of tip jar proceeds.

Unlike Napster, which is being sued by the Recording Industry Association of America for allowing its users to share copyright-protected music, this effort comes from a major retailer and is delivered with support from the recording industry.

"We've created the first free music downloads community that benefits everyone involved: fans, artists and labels," said Andy Jassy, general manager of's Music Store. "Fans can check out great free music, artists get exposure to more than 30 million customers -- driving CD sales and tips -- and labels benefit from a proven way to market their artists' releases," he said.

In recent weeks, Amazon CEO Jeff Bezos has called for a halt to sales of unprofitable items and has moved to draw revenue by charging publishers to promote books in e-mail promotions.

Ryan Jones, an analyst at Yankee Group, Boston, views the move as Amazon's attempt to catch up to Napster.

"Napster really jumped ahead of the curve and did it without the permission of content providers," Jones said. "Now, those with the permission of content providers are trying to catch up."

For example, now offers song downloads from its site, but it charges $2 to $3 per download and the use of the music file is limited.

The Amazon initiative is expected to increase its customer base, boost CD sales and get its customers used to making micropayments via virtual tip jars.

Amazon wants to "capture the frenzy of those who have been downloading music files and get them into the Amazon family," said Paul Ritter, director of online retail strategies at Yankee Group.

Implementing micropayments via virtual tip jars is part of a larger goal to improve overall profit margin, Ritter said.

"This opens the strategy for them to sell $1 or $5 items," Ritter said. "[The music program] is to test their micropayment abilities. Once Amazon works out the technology, they could charge micropayments for instant editorial and news content downloads, for example. This could build into a whole new cottage industry for Amazon."

The strategy is in line with Amazon's recent moves to produce higher margins, including raising its auction fees. In mid-February, Amazon launched its Software Downloads Store, where customers can pay a fee to download software programs directly to their computers.

Amazon expects the music download system -- which also allows independent musicians to upload songs for free -- to drive CD sales.

"Giving customers the ability to try before they buy is a proven method to drive sales," Amazon said in a statement. Artists offering free downloads on Amazon for the past 22 months have experienced an average 40 percent increase in CD sales.

After listening to a downloaded file, music fans can buy the artist's CD with a single click.

Amazon's free service will allow consumers to use music files in more ways than they can use downloaded files from more restrictive record label sites, according to Jones. But that does not guarantee the service's success, he said.

"They're not going to be beating Napster anytime soon," Jones said. "Their library is a lot more limited." Also, other free music services are improving, Jones added.

The Free Music Downloads area will include editor's recommendations, customer reviews and most popular downloads lists. In conjunction with the new community, Amazon's music store is hosting an online auction featuring autographed prints, photo books and CDs by well-known acts and musicians.

Christine Blank contributed to this report


Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above