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CDNow cedes operations to Amazon.com
December 7, 2002 7:43 PM   Subscribe

CDNow cedes operations to Amazon.com. While looking up some 'non-traditional' Christmas music, I noticed this site's layout looked oddly familiar. Is there reason for concern about the fact that Amazon is taking over shop for it's rival or is this an example of using what's the 'best' in a competitive market?
posted by phyrewerx (26 comments total)

 
In the case of Microsoft, with a long and well documented history of predatory behavior, this would be bad news. In the case of Amazon, where there isn't the same level of abuse, it's what capitalism is all about.
posted by jragon at 8:10 PM on December 7, 2002


"Is there reason for concern about the fact that Amazon is taking over shop for it's rival or is this an example of using what's the 'best' in a competitive market?"

Hmmm. That's a tough question. I guess the standard line of thought is that you have to take into account any efficiencies that can be gained by consolidating the operations and weigh those against the anti-competitive effects that would also result.

I suppose the potential harm of the two rivals merging would be the possibility of Amazon attaining some sort of monopoly status and raising prices.

Is that really feasible? I personally don't think so - they are still constrained in how much they can charge by the existence of traditional CD retailers (not to mention the threat of new CD retailers entering the market). In other words, if Amazon decides to start charging $20.00 for a CD, it's not like people have no other options - they can just go to the mall, or order through another, smaller online retailer.

I guess you could make some argument that the online CD market is separate from the brick-and-mortar market, and so Amazon could become an online monopoly, and charge more than the stores at the mall, but I think they would still be constrained by the possibility of somebody else setting up their own website and undercutting their prices - it can't be that hard for some new company to start a similar website.

My guess would be that CDNow wasn't making any money, and Amazon was able to absorb their business and eliminate some of their costs - so you might argue that it's a good thing. Of course, that's rampant speculation, but the FTC reviews all mergers before they are consummated anyway, and they are fairly sophisticated, so you can rest assured that this has been checked out before it went through.

But if Amazon does start charging $20.00 for a CD, there's an easy solution: support your local record store and don't order from Amazon.
posted by singmesomething at 8:17 PM on December 7, 2002


Thank god, Go Amazon. I don't really give a damn what they do but I'd like to see a few internet companies become really successful and show how its done so it can jumpstart another boom. If eBay, Amazon, and traditional Brick and Mortars (jesus, I haven't used that buzzword in a year) can carve out some internet profits, it'll be better for all of us.

Of course, as soon as I see an Amazon.com Bowl game, I will pray for their immediate destruction.
posted by Stan Chin at 8:19 PM on December 7, 2002


False dilemma. What is this, sweeps week?

It's a very competitive market, and there's little sense in being there if you don't have the wherewithal to invest the way Amazon can in back-end, usability, and customer experience areas. Bertelsmann has already seen its online investments shrivel and sometimes die, and faced a long slow decline at CDNow. This really just continues the longstanding, overt Amazon strategy of becoming the top shopping portal on the web. They cannily learned from their own mistakes, and with the recent expansions into catalogs and apparel, they're well on their way.

I don't think the Microsoft comparison holds, either, jragon. Amazon isn't stealing business from CD-Now -- they're just choosing to make money on the blades instead of the razors, if you will, to be the successful shopkeeper in the embittered, impoverished gold rush town.
posted by dhartung at 8:21 PM on December 7, 2002


God knows how they do it, but Amazon just seems to know how to take a good idea and make it better. I used to prefer CDNow to Amazon before I switched to Half.com (honestly, who the fuck is going to pay $18.00 for a 1995 Magnetic Fields CD when you can find it new on Half.com for ten?), before Amazon's "Used & New" became much, much better than Half.com could ever be. (For instance, on Amazon you can -- gasp! -- e-mail the person who buys a CD from you! Think of the possibilities!)
posted by tweebiscuit at 8:27 PM on December 7, 2002


While looking up some 'non-traditional' Christmas music

Just buy everyone on your xmas list a Jandek album... Cheap gifts, and you'll quickly find out who your real friends are.

In the meantime... just go to allmusic.com. (I always liked it more than cdnow, anyway).
posted by cadastral at 8:41 PM on December 7, 2002


The two things I liked most about CDNow was the way they linked the artist with influences and followers (which allmusic.com does) and the fact that the sound clips were not in real audio. Where can you go to listen to a non-real audio sample of the songs now? (without resorting to P2P as Pitchfork suggest). I must admit that, like many people, I used CDNow more for research purposes than to buy albums, so I guess I am one of the reasons they failed.
posted by HSWilson at 9:21 PM on December 7, 2002


y'know, I used to shop at cdnow, years ago. never got any spam from them, and I had all my mail preferences set to "no".

but apparently to commemorate their borgification of cdnow, amazon decided to start spamming me about it.

if I wasn't already boycotting the gits for other reasons, this would certainly be boulder pledge enough.

don't forget, amazon already took over toysrus' online presence (and I b'lieve there were a few others borged as well in recent past...)
posted by dorian at 9:26 PM on December 7, 2002


I don't really know if any online-only company could be seen as a monopoly. They don't seem to have the power to compete with the brick-and-mortar shops out there. I like amazon, I'll use it if I find a good deal, but when I have to pay a normal price I'd much rather have a local independent music store special order something for me.

Even beyond indie shops, I don't see Virgin or Tower closing their doors in the wake of losses to online shops.
posted by Kellydamnit at 9:35 PM on December 7, 2002


RIP CDNow, online cd store that I loved.

Helllooo, InSound . . .
posted by cinderful at 9:36 PM on December 7, 2002


HSWilson - CD Baby lets you listen to samples in MP3. They only carry independent artists. This is a BIG plus for me, but it means you want find very many songs you've heard on the radio. Their search engine will try to artists that "sound like" whatever well known artist you search on which is kind of cool if maybe a little spotty.
posted by willnot at 9:38 PM on December 7, 2002


I remember when CDNow merged with Music Blvd. (I think thats what it was called...oh so long ago). Music Blvd. had great coupons which would be usually for $10, which would cover an EP and shipping....plus most of the time you could combine them. I have countless LPs and CDEPS from those days which I paid nothing at all for. oh the glory days.
posted by robotrock at 10:18 PM on December 7, 2002


Heh I remember the days of Music Blvd., CDNOW, and their $10 coupon very well... I still ended up going broke buying CD's... you figure that one out. Anyway, I really like Cheap-CD's. If you know what you want you can get it usually much cheaper than you could anywhere else.
posted by gyc at 10:37 PM on December 7, 2002


Ick. CDnow gives me the pip. Constant spam, high prices and rotten service are all baked into the every-reason-not-to-ever-buy-anything-from-them-ever-again pie.

Amazon, on the other hand, is tops. Polite, prompt and reasonable, with overseas shipping!

Sometimes news is good news.
posted by hama7 at 1:45 AM on December 8, 2002


I remember when CDNow merged with Music Blvd. (I think thats what it was called...oh so long ago). Music Blvd. had great coupons which would be usually for $10, which would cover an EP and shipping....plus most of the time you could combine them. I have countless LPs and CDEPS from those days which I paid nothing at all for. oh the glory days.

Gee—how they possibly could have gone out of business???

Well, I'm disappointed that CDNOW has knuckled under to Amazon's dominance, but if they weren't paying the bills, they would have gone under either way. Personally, I found Amazon's search engine to be far superior to CDNOW's fumbling engine, and I usually got a better deal from Amazon anyways. Still, CDNOW was one of the first successful (non-pr0n) online retailers, and they did have a pretty good run.

Though I am curious of what will happen to CDNOW's editorial content and various album reviews. Would they be rolled into Amazon, or would they just get tossed out with the rest of CDNOW's legacy site?
posted by Down10 at 3:03 AM on December 8, 2002


Theories abound, yet there is one overriding reason why CDNow tanked: their prices sucked!

You don't have to be all that savvy to notice that CDUniverse and MyMusic have prices that make most large online CD retailers weep.

And, given more motivation and time, you can easily find other smaller, hungrier retailers with even better prices.

I'll admit that there was a time when CDNow was a decent outlet, and I spent a good deal of money there myself, but that seems like a long bygone era when measured in internet years.
posted by Brewer at 5:28 AM on December 8, 2002


I agree that Amazon will never attain monopoly status, especially since they allow any other retailer to sell the same products at a lower price through their Marketplace program (of course you have to pay Amazon 15% off the top!)

As an online music retailer myself, it is worth it though, for the huge customer base that Amazon brings to the table. I could offer a rare CD on my site and maybe a few thousand people would come across it. If I put it on Amazon for sale, millions will. Amazon would prefer to make their profits through commissions anyway having seen the successes of Ebay.

As for Tower Records not being affected by the online world, think again. Not only are they closing stores, but they discontinued Pulse Magazine this month after 10 great years of reviews/articles.

If you want to help the smaller online music retailers and comparison shop at the same time, check out GEMM which offers listings from retailers and individuals world-wide.
posted by bake at 6:37 AM on December 8, 2002


For used CDs, I've been using spun.com lately, gives you more quality assurance than half.com. The thing I like about amazon is the amount of imports they have, especially from the UK.

But then of course there is Barnes & Noble Online and offline, Media Play/SamGoody Online and offline, Best Buy Online and offline, etc. Their monopoly status is a long way off, if it ever comes even close.
posted by benjh at 7:18 AM on December 8, 2002


For what it's worth, for used CDs, I've had good experience with Second Spin.
posted by normy at 9:04 AM on December 8, 2002


There is no question that Amazon is vary handy, has a large selection, and offers--at least in my experience--fine service. The only long-term problem facing Amazon is that they still are not making money. Although it is difficult to separate the company's fixed and variable costs accurately given the lack of detail in the financials available online, one can make a rough guess based on their 2001 gross margin percentage, that they would need an additional $880 million in sales to break even. Of course, they could also reduce expenses by a quarter of a billion or so. To be fair, these financials are now a year old, but either scenario is not guaranteed. My guess is that the CDNow situation is analogous to buying a failed competitor's mailing list.

Trust me, I would like to see Amazon hang around for a long time. There is nothing handier than checking out your mother-in-law's wish list, clicking a few buttons, and having the perfect gift arrive on-time.

Sure the company has lasted through a tough economy, made the right partnerships, and has built a huge customer base. This does not change the fact that Amazon is still faced with the fact that it must become profitable quickly. The Borg comparison doesn't hold; Amazon's existence isn't that inevitable.
posted by samuelad at 10:35 AM on December 8, 2002


CDnow was a fantastic product..... how they lost money is beyond me. Probably just too many people working there. Amazon's search results are horrible compared to CDnows.... I will miss them.

I suggest as a replacement our neighbors to the north at CD Plus. Our exchange rate to Canada means fantastic deals... almost nothing over $12.

Plus I have found CDs at this site that I have found no where else.
posted by dancu at 11:19 AM on December 8, 2002


Anyone remember CDNow's telnet ordering system? They dropped it a long time ago but cdconnection.com kept their telnet interface until at least 1999. Ordering music online felt like you were hacking into some old mainframe. It seemed a lot more exciting than the point-and-click experience.

(By the way, check out this announcement of CDNow's grand opening in August 1994.)
posted by zsazsa at 11:22 AM on December 8, 2002


The most distressing thing about this for me was that, despite the fact that I had never visited this website before in my life, I was greeted with a "hello, Kate Fairfax" as soon as I loaded the page. I do have an Amazon account as Kate, but I didn't think that I had ever visited it from this computer. Hmmm, consumer privacy and protection?
posted by kate_fairfax at 11:23 AM on December 8, 2002


I noticed this about a week or two ago...

Sad, really. Although I think Amazon's customer reviews and recommendations are invaluable, I liked the way CDNow indexed albums.

Amazon, for some reason, doesn't index them by the latest releases first.

It was nice to go to CDNow and see whether a certain artist had a new Album out. With Amazon, it won't list these latest releases at the top (even when you tell it to sort in order of release date...)
posted by LoopSouth at 1:58 PM on December 8, 2002


I've been buying online from Django's for the past several years. It merged several brick-and-mortar independent stores' online presences, including Cellphane Squares' in Seattle, into one larger site.

They sell new and used, with free shipping worldwide for orders over $25US. I've probably purchased somewhere in the neighborhood of 100 CDs from them, mostly used, and have never had any problems of any sort, which the people that I know that use half.com can NOT say from what they tell me.

For my money, the best feature that Django's offers is their 'Notify Me' service. For any out-of-stock title you are looking for, even used titles, you can request an email notification when they receive a copy. It automates tracking down those obscure titles you've been combing the used bins for.
posted by runthegamut at 2:15 PM on December 8, 2002


And for the music store buyout record (no pun intended), Django's changed ownership a few months ago.
posted by gluechunk at 10:35 PM on December 8, 2002


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