Amazon Goes Gaga For Gaga. Servers Melt, Business Changes.

I’ve been screaming for change in the music business for years. Despite selling a cutting-edge and constantly-changing product, music labels have resisted business change in a way that boggles the mind. Yesterday, the music business changed … but we’ll have to wait and see if the change takes hold.

Lady Gaga and Amazon.com got together and offered Gaga’s new album for ninety-nine cents. Smart move on Gaga’s part, because even with all the revenue an artist with her popularity is passing on by all but giving away an album that she would have sold millions of copies of at full price, the interest she drums up and potential to garner millions of new fans by foregoing that revenue is even larger.

And Lady Gaga isn’t even the smart one in this story.

Amazon.com is beginning a full assault on Apple’s iTunes in a try at becoming a music distribution service of consequence. Sure, there’s no physical CD (business change, business change, business change …), but by distributing Lady Gaga’s album Amazon serves as “the music label”. And that’s still not the big win.

Amazon is also trying to become a big player in cloud storage, where we all keep our stuff “out there” instead of on hard drives in our computers. And the genius add-on to the Lady Gaga deal is that when you download Gaga’s album through the Amazon/music label deal you store it, even if only fleetingly, on the Amazon cloud service account you need to download the Lady Gaga album.

Oh: and you get extra storage in Amazon’s cloud as a bonus for downloading the album. For a year. At that point, if Amazon’s played their cards right, you will have uploaded more files than fit in their free plan and won’t have any choice but start paying for their “gift”.

OK, so you’ll have a choice; you can download those files you just convinced yourself can safely live in someone else’s computers back down to your own and tell Amazon not to bill you. But you won’t. Business Change. Big time.

As Lady Gaga sings: they are beautiful, no matter what you say.

I don’t know what effect this will have on the problem of piracy that the music business still hasn’t figured out. France’s solution to music piracy still seems like the best shot anyone’s taken. Maybe movie studios have it right, essentially asking you to pirate their stuff. But I do know this is huge business change, and Lady Gaga is at the center of it.

Now if I could just stand listening to her music.