A paradox of the new music industry: Albums sell less and less well every year, but as a marketing tool they are now more important than ever. 
 
 A case in point is Lady Gaga, whose new album, “Born This Way” (Interscope), was released on May 23 and sold 1,108,000 copies in the United States in its first week, according to Nielsen SoundScan. Some 662,000 of those sales, or about 60 percent, were digital downloads, the most any album has ever sold in a week. 
 
 The extraordinary success of “Born This Way” — it outsold the next 42 albums on Billboard’s chart combined — are a testimony to Lady Gaga’s appeal and the hard work of her business team, which devised one of the most extensive and savvy marketing campaigns ever mounted in music. 
 
 Once an artist’s biggest source of income, recorded music now plays second fiddle to touring, endorsements, merchandise sales and an array of other revenue streams once considered ancillary. That’s especially true for an artist like Lady Gaga, who has lined up more branding and promotional deals in the last six months than most artists will in a lifetime. 
 
 “People lose sight of how an artist becomes successful in 2011,” said Bill Werde, Billboard’s editorial director. “She could have sold 600,000 albums, or a million, or two million. But in terms of revenue that’s going to be a smaller piece of the pie.” 
 
 If there is any asterisk on her achievement, it’s that about two-thirds of the digital downloads are owed to a 99-cent deal offered by Amazon, which helped sales pass the million mark. The huge discount drew an angry reaction from brick-and-mortar retailers who saw their sales drop in response. 
 
 Ish Cuebas, vice president for music merchandising of Trans World Entertainment, which operates 460 music and media stores, including F.Y.E., said that his shops sold about half as many copies of “Born This Way” as he had expected. 
 
 “I don’t think it sends a good message,” Mr. Cuebas said of Amazon’s deal. “I can understand what Amazon did, but I think it devalues music even further. In the customer’s mind it’s worth 99 cents.” 
 
 But something is still needed to organize the flurry of products, activities and side deals that now constitute an artist’s business, and most often that role is filled by an album, no matter what the cost. The album still establishes an artist’s sound, look and message and provides an anchor around which long promotions can be built, from early singles (and leaks) to concert tours and television appearances. 
 
 Recognizing this, Interscope and Lady Gaga’s manager, Troy Carter, built their campaign around the release date, which they chose late last year to take advantage of music-related high points on the television calendar, like the Grammy Awards in February (where Lady Gaga played the premiere of her song “Born This Way”) and the finale of “American Idol” last week (where she sang her latest single, “The Edge of Glory”). 
 
 “We wanted to approach this like we were opening a blockbuster film,” said Steve Berman, vice chairman of Interscope Geffen A&M.; “It became: ‘We’ll put a flag in that date well in advance. We won’t move. And what we’ll do for the next six months is pour gas on that fire every day, really branding the date.’ ” 
 
 Like any good movie campaign the selling of “Born This Way” began nearly a year in advance and continued as a well-timed drumbeat of promotional appearances, retail tie-ins and media deals that rose to a climax as the release date approached. 
 
 Lady Gaga announced the title of the album at MTV’s Video Music Awards last September and gave the release date on New Year’s Eve. As the promotions piled up in recent weeks, she became inescapable. If you missed her HBO concert special or “Saturday Night Live” appearance, her GagaVille online game or fashion sale through Gilt Groupe, then perhaps you rode in one of the New York City subway cars decked out top to bottom with “Born This Way” advertising. 
 
 Lady Gaga, whose real name is Stefani Germanotta, apparently knows the value of these deals. Mr. Carter said she accompanied him on numerous trips to retailers and to Silicon Valley start-ups eager to attach themselves to the Gaga brand. 
 
 But the most effective offering may have been the one the Gaga team knew nothing about. On May 23 Amazon put the digital version of the album on sale for 99 cents to draw music fans to Cloud Drive, its entry into the world of so-called cloud music services, which store a user’s songs on remote servers. 
 
 Amazon paid Interscope’s distributor, Universal, the full wholesale price for the album — between $8 and $9 — and accepted the difference as a loss, according to several people briefed on the sales arrangement, who were not authorized to speak publicly about the details. Billboard reported that Amazon’s two-day sale yielded about 440,000 digital sales; if correct, that would mean that the retailer lost more than $3 million on the promotion. (Amazon declined to comment.) 
 
 Several other new releases reached high on Billboard’s album chart this week, but none came close to “Born This Way.” Brad Paisley’s new “This Is Country Music” (Arista Nashville) is No. 2 with 153,000 copies sold, and “Glee: The Music, Vol. 6” (Columbia) sold 80,000, reaching No. 4. Adele’s “21” (XL), which has been No. 1 for a total of nine weeks this year, fell two spots to No. 3 with 127,000. 
 
 Mr. Carter, Lady Gaga’s manager, said the prerelease promotional campaign for “Born This Way” had been in full swing for six months. “If you look at ‘The Fame,’ ” Mr. Carter continued, referring to Lady Gaga’s first album, “it wasn’t marketing ploys that drove the success of that album. It was the quality of the content and Gaga’s willingness to go around the world and play for the fans, do the promotion, do the TV shows, visit the radio stations and the club D.J.’s. There’s a lot more of that than there are marketing ploys.” 
 
 That means the promotion for “Born This Way” is far from over. “This is where the work begins,” he said. ||||| After all that talk about underperforming singles and creative bankruptcy and overexposure, Lady Gaga did exactly what she was supposed to do with Born This Way, her first album since officially branding herself a superstar: sell a ridiculous number of units. The exact number, 1.1 million in the first week , is startling — but it comes with a caveat. That final tally was greatly boosted by the fact that Amazon, looking to drive people toward their new Cloud Drive music locker service, dropped the price on Born This Way’s digital release to an all-new loss-leader low of 99 cents. Over the two days of the offer, the album was downloaded 440,000 times, roughly two thirds of its overall digital sales count. So how much did Amazon cough up in the process? 
 
 According to the New York Times, Amazon paid Gaga’s distributor, Universal, full price (between $8 or $9 per album), meaning they lost more than $3 million. That is certainly a ton of money to have kicked into your campaign by an entity that has no actual interest in how well your album sells, and it provides much fodder for anyone wishing to quibble with the validity of the 1.1 million number. But Lady Gaga should still get a lot of the credit: Amazon would have wanted to pull this kind of sales gimmick with someone, and, thanks to the all-permeating pop-culture presence that Gaga has cultivated, she was the top option. Meanwhile, Amazon chalks all those millions up to marketing costs and moves on. Win-win! Still, Taylor Swift — who only mustered a paltry 1.04 million sales for Speak Now’s first week — is probably pretty salted.
– Lady Gaga sold a whopping 1.1 million copies of Born This Way in its first week, but 440,000 of those copies went for just 99 cents on Amazon.com. Amazon, however, did pay Gaga's distributor the full price of $8 to $9 per album—which means, the New York Times calculates, the online retailer lost more than $3 million. Of course, New York magazine points out, a big point of the gimmick was to drum up new users for its Cloud Drive service, so the company can just consider those millions "marketing costs." As for Gaga, the move does provide "much fodder for anyone wishing to quibble with the validity of the 1.1 million number," writes Amos Barshad. Click to see which artist Barshad thinks is "probably pretty salted" right now.