Apple Pressuring Music Labels To Drop Amazon's MP3 Daily Deal Scheme

Music magazine Billboard has reported that iPhone maker Apple Inc. has advised several music labels against taking taking part in Amazon MP3 Daily Deal, threatening to remove marketing support for their releases from its popular iTunes online music store if they do so.

According to an anonymous music executive talking to Billboard, when Amazon first launched its Daily Deal back in 2008, its sole purpose was to direct web traffic towards its online MP3 store and music labels had to pay nothing for being included in the promotion.

Explaining the reason behind Apple's aggressive marketing tactics, the executive, whose name was withheld on request, said that in mid 2009, Daily Deal "promotion morphed into something where the labels make arrangements to provide an exclusive selling window with Amazon for a big release expected to do a lot of business on street date."

In return of promotions in the Daily Deal scheme, Amazon was asking music labels to give it exclusive rights to sell the music album or single on the website, one day before the actual release of the album.

These tactics succeeded in annoying the Cupertino based company, whose iTunes music store is the number one music retail destination in North America, as the deals that Amazon was striking with certain labels were proving to be very profitable.

Our Comments

For example, when Amazon released Vampire Weekend's 'Contra' a day before the launch, the move was instrumental in 124,000 sales figure in the first week, 60 percent of which were digital downloads. When Apple is not happy, things can go very wrong.

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