Update: Lady Gaga's 'Born This Way' Projected to Sell 1 Million First Week

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Billboard projects that Lady Gaga's "Born This Way" will debut with first-week sales of at least a million units, far outpacing earlier projections, thanks to explosive sales at Amazon, which priced the album at 99 cents for two days this week.

According to sources, "Born This Way," scanned 330,000 units at Amazon on Monday, even though the unprecedented traffic derailed the Amazon servers. While the Amazon experience left some consumers in a sour mood, the news on the technical glitch helped heighten awareness about the album (not that Interscope and Lady Gaga needed any help in that department).

As a make-good for customers who experienced difficulty in downloading "Born This Way" on Monday, May 23, the merchant priced the album again at 99 cents on Thursday (May 26). Industry sources expected that the second-day availability of 99-cent prices would generate another 150,000 scans.

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But even without a second day of 99-cent pricing, "Born This Way" was on its way to a million-unit debut week, sources told Billboard. On the first day alone, the album moved at least 500,000 units, with sources saying that first day sales at iTunes totaled 104,000 units; Best Buy, 45,000 units; Target, 35,000 units and Starbucks, 10,000 units. Consequently, industry prognosticators project that Best Buy will hit 200,000 units by the end of the SoundScan week on May 29; Target will reach 150,000; Wal-Mart will hit 125,000, and iTunes will hit 200,000 units.

Moreover, the album is one of the most widely distributed titles in current times, available in about 20,000 storefronts, including CVS pharmacies, Whole Foods, Walgreens and others, according to UMG sources.

The pricing of the Lady Gaga album and how the industry reacted presents an interesting dichotomy for the industry.

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On the one hand, some brick-and-mortar merchants complained that "Born This Way" units moved both at Amazon and at Best Buy (which gave away the album for free with a smartphone), shouldn't be counted in compiling the Billboard 200 chart. Billboard decided to count the former, but not the latter.

But beyond the loss-leader strategies, "Born This Way" was also a story about a pricing rebound. Of the 2.1 million units shipped by Universal Music Group before street date, 1.3 million were for the deluxe version, sources say. The standard physical version, which contains 14 songs, listed for $12.99 and wholesaled at $10.35; while the deluxe version, which contains three extra tracks on the main album and a second remix disc with 10 tracks, listed for $21.98 and $14.00 wholesale. Meanwhile, the digital standard version carried an $11.99 list price and a wholesale of $8.40; while the deluxe digital version carried a $15.99 list, which translates into an $11.20 whole.

Beyond Amazon's 99-cent deal, retail sources say that the deluxe version far exceeded opening-day expectations, with the higher-priced album taking as much as 70% of sales, in both CD and digital versions.

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Last month, UMG executives were expecting sales of about 400,000 units and went to higher projections as the album's street date approached. By Monday they were talking 650,000-700,000 units, and then moved it up to 800,000-900,000 units. It wasn't until Wednesday that they began conceding the possibility of a million-unit week.

Amazingly enough, as recently as Monday -- the "Born This Way" street date -- some merchants and executives at competing labels felt that Lady Gaga was overexposed and could suffer a sales backlash.

So much for that train of thought ...