Amazon Selling Popular MP3s for 69 Cents

Look out, Apple: Amazon's just fired a shot that could challenge iTunes' dominance in digital music. Amazon has slashed the price of several popular songs to just $0.69 on its Amazon MP3 service. The same songs are still $1.29 on iTunes.

The move is only the latest in the digital music space by Amazon, who remains a distant second to Apple in terms of sales. iTunes commands about 70 percent of the market according to NPD Group, while Amazon controls just 10 percent. Digital music on the cheap may be one of the few ways the retailer may have left to compete.

It's not clear as to whether the price drop was a blessing from the music labels, or if Amazon has decided to take a profit hit in the name of gaining market share. It's no secret that some music industry execs would like to limit iTunes' clout in digital music, and may have given more favorable terms to competitors.

Walmart still holds the top spot for cheapest MP3s, though: it has a three-tier pricing system of $0.64, $0.94, and $1.24 tracks, although popular tracks are typically priced at the highest tier.

Amazon launched its cloud music service, which allows customers to store music purchased through Amazon for free, in late March. As you may have guessed, this didn't go over too well with the music industry, who cried foul within hours of the service's launch.

Apple raised prices on some of its catalog from $0.99 to $1.29 back in 2007 when it announced higher quality-DRM free tracks in May of that year. That price differential didn't last long however, and amid increasing competition Apple did away with the 30 cent premium for DRM-less music in October.

These days, the $1.29 price point is reserved for special content (the Beatles catalog for example) or best-selling tracks from major artists. But with Amazon now apparently undercutting iTunes by nearly half, Apple may be forced to answer back.

Just a few examples of this disparity: Lady Gaga's hit "Born This Way" and "Judas" are now $0.69 on Amazon (versus $1.29 on iTunes); the same goes for Taio Cruz's "Dynamite," Cee Lo Green's "Forget You," and The Black Eyed Peas' "I Gotta Feeling."

A check of Amazon MP3 Store's page for the 69 cent songs listed 204 tracks as of Friday afternoon.

For more tech news and commentary, follow Ed on Twitter at @edoswald.

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