Groupon Latest Foray Into Digital Music Flops

Groupon’s nation-wide offer today is a digital live album by semi-famous British singer-songwriter David Gray for $6. In a world where Starbucks is now one of the largest music retailers, the fact that Groupon is trying to become the latest unconventional outlet for music doesn’t come as a surprise. What does come as a surprise, however (besides the fact that it’s supposedly “on sale” for 54% off even though it’s a Groupon exclusive), are the lackluster sales. Just about 125 New Yorkers have bought the album so far, for example, which is actually a large number, given that only 17 people in San Francisco have bothered to buy the deal so far and 7 Groupon users in Omaha, NE (where the deal hasn’t even tipped yet).

To put these numbers into perspective, Groupon sold about 400 Wine deals in New York, 252 Botox treatments for $150 in San Francisco today and 504 manicures for $17 in Omaha (all these numbers are correct as of 11:30am PT).

Groupon, of course, has experienced other disappointing deals over the years, but it’s hard not to imagine that the company thought that a nation-wide deal like this would do a lot better – especially given that Gray has sold over 12 million albums over the course of his career.

This is not Groupon’s first foray into digital muisc. The company also offered Rhianna’s latest album for a discount in November 2010, but this is the first time the company is using a RCRD LBL-branded widget to fulfill sales.

Why?

It’s arguable why this deal is such a flop. Maybe Gray just isn’t as popular as Groupon thought? Maybe users don’t want to buy music from Groupon and miss previews and other goodies they have come to expect from online music retailers iTunes and Amazon? If you have a hunch, let us know in the comments.