In its second week live, Google Music shot a cannonball across the bow of iTunes and Amazon by pricing 13 frontline titles at $1.99 on Cyber Monday. Amazon immediately responded by pricing the same titles at that price point, but iTunes ignored the Google Music gambit, and didn't adjust pricing at all on Monday.
On Tuesday morning, Google Music had pulled back from its aggressive pricing stance, but Amazon stood firm with the $1.99 pricing until mid-afternoon (ET) on Tuesday, when the albums on sale reverted to more standard prices.
The pricing move was done without the support of the labels, which means that Google and then Amazon was loss-leadering those titles, which normally wholesale in the MP3 form for $7.00 for most albums and about $9.00 for superstar titles.
In going to the price point, Google Music appeared to be selective, choosing only the standard versions of albums in most cases. The titles priced at $1.99 included standard versions of Drake's "Take Care," Rihanna's "Talk That Talk," Mary J. Blige's "My Life II ... The Journey Continues," and two various-artist compilations, "Now That's What I Call Music 40" and "This Warm December." Also priced at $1.99 were Justin Bieber's "Under The Mistletoe," She & Him's "A Very She & Him Christmas," Coldplay's "Mylo Xyloto" and Florence + the Machine's "Ceremonials."
One label sales executive that specializes in digital said that "Google was just trying to make some noise for Cyber Monday and draw attention to their newly launched service. And Amazon responded and showed that they are not going to let Google beat them in price."
For the albums featured at the $1.99 price points, the major labels that issued those titles said that they did not give either merchant any pricing break, nor did they support that pricing by featuring it on any of their websites. But they agreed that merchants are allowed to price product at whatever price point they chose.
The $1.99 pricing for certain albums, depending on release date, violates Billboard's new pricing policy for the Billboard 200 chart, whereby the magazine will disallow the unit sales of any new title that sells for less than $3.49 within the first four weeks of availability and for the full holiday season for any Christmas title priced below that threshold.