Amazon has weekly specials on MP3 albums ($4-$8 each) that download directly to iTunes or Windows Media player to be burned to CDs or put onto your iPod.
I recently purchased Cold Play and Feist albums both for less than $5 each using Amazon. This is a great example of how digital downloads are going to fully replace digital media in the near future. Why waste all that money making and distributing CDs when you can make them available online for a fair price and still make profit?
Same goes for Blu-Ray DVD - I can download HD movies for less than Blu-Ray. True they don't come with a cool jacket or disc to show my friends, but they are a fraction of the price and give me the same HD movie.
(Yes, iTunes has been doing this for sometime, but combining this approach with a largely discounted price as compared to CD/DVD media is truly a Amazon trait)
Event though CDs/DVDs have incredible profit margins, digital downloads should become the most profitable form of media delivery since they lack physical packaging and shipping/delivery mechanisms - even if they sell for half as much....
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