M+E Daily

Gaga Saga, Part II: Amazon Says of Cloud Service Promotion, ‘This Time We’re Ready’

In of Lady Gaga’s new “Born This Way” album today, Amazon aims to introduce its MP3 store and cloud music service to consumers that learned of Monday’s headline-grabbing promotion too late.

The retailer promises that today’s promotion will be free of the digital fulfillment bottlenecks that marred Monday’s marketing success. “We saw extraordinary response to Monday’s promotion – far above what we expected – [Lady Gaga] definitely melted some servers. So we’re doing it again, and this time we’re ready,” says Craig Pape, Amazon’s director of music.

Even absent strains on servers, the repeat of the 99-cent sale is not without its negative effects on goodwill. One Amazon MP3 customer tweeted in frustration that he purchased the album for $6.99 from the site after he missed Monday’s offer.

The re-do nonetheless will add to a digital sales total for Lady Gaga that may already exceed 350,000 units, according to one estimate (via All Things Digital). With “Born This Way,” Amazon likely has seen sales of an album top 100,000 copies for the first time at its MP3 store (via Billboard).

Although the retailer reportedly paid full wholesale price to Universal Music Group for the album (about $9 a unit), the cost of running two 99-cent promotions will prove to be small if they help Amazon build its returning customer base.

The artist’s camp, meanwhile, has nothing but praise for the promotion, in contrast to labels and acts that sounded notes of concern last year over the retailer’s devaluation of their products.

“Although we weren’t aware of Amazon’s deal that they were offering, I applaud them for their efforts,” Troy Carter, Lady Gaga’s manager, writes to music industry blogger Bob Lefsetz. “Anytime we can get people to purchase music legally, it’s a good thing for the business.”

Carter also disputes Lefsetz’s earlier speculation that a different approach to marketing “Born This Way,” such as a promotion with social commerce site Groupon, could have netted higher album sales for the hotly anticipated Gaga album.

“We’ve partnered with over 27,000 non-traditional retailers worldwide on this release,” the manager says. “No one prayed to a particular retailer. We tried something different, we’ll see if it works. As you praise Groupon,” Carter tells Lefetz, “do your research and see how well they did on the Def Jam releases that they worked on. It FAILED. They aborted music for now. It’s all trial and error.”

Ahead of the Thanksgiving holiday last year, Groupon and Island Def Jam offered $5 off a $10 download of a new album from singer Rihanna; but only some 4,100 consumers took advantage of the promotion, according to tickers on 19 local Groupon sites.