Amazon AutoRip and Pricing Models

Last week Amazon introduced something called AutoRip. Basic premise: you buy a physical CD from Amazon, and if it’s AutoRip eligible, Amazon will give you a digital copy of the CD in your Amazon Cloud Drive, gratis. I presume this is Amazon’s way of trying to push some physical-only CD folks into the cloud, and hey, it doesn’t seem bad for any of us.

What I’m curious about, though, and haven’t seen addressed anywhere, is the impact this might have on the pricing models for digital-only purchases.

Last night my wife headed over to Amazon looking to purchase an older CD of Jim Brickman lullabies - something instrumental for a kid to listen to at night. The MP3 version of the album is currently offered on Amazon for $9.99.

But wait, what’s this?

That’s right, this album is also available with a physical CD and AutoRip. For $8.57. And that CD happens to have free shipping with our Amazon Prime membership.

Which means that it was $1.42 cheaper for my wife to get the MP3 downloads if she agreed to have Amazon ship her a physical copy of the disc as well. Something is wrong with that picture.

While this CD may be an unusual case, it’s by no means unique. The original cast recording of Les Miserables is currently featured on Amazon’s “recently released AutoRip CDs” page at $18.99 for MP3s or $16.99 for the physical CD + AutoRip.

Other CDs on that page have pricing that seems to be more the right way 'round - a recent Susan Boyle CD is $10.99 Physical/$5.00 MP3, a Toby Keith CD at $11.88/$6.99 - but some are awfully close to parity, such as a Lady Antebellum CD at $10/$9.49 and a Jason Aldean CD for $9.99/$8.99.

Impacts to the pricing model may be one reason keeping Amazon from extending something useful like AutoRip to books as well. It sure doesn’t seem like offering physical + digital cheaper than digital only is a money-making proposition.