Apple and Free Music?

March 20, 2008

As we all know, the free craze has been forcing companies to rethink their business tactics. To my surprise, Apple is thinking about it as well. Apple + free music = Are you kidding me?! I guess this will be an add on to Dave’s post..

But of course there is a catch. To receive unlimited free access to the music library, customers have to be willing to pay more for the iPod and iPod Phone playing and digital media storing devices. Apple has to wake up and smell the coffee. Some of the company’s rivals are experimenting with new ways to distribute online music, even if that means giving it away. So as of now, “Apple is negotiating with record labels over a deal to offer a monthly music subscription for the iPhone, as well as an unlimited music bundle for both the iPod and iPhone” according to a cited unnamed music industry source.

As of right now, the iPod shuffle starts at $49, and the iPhones start at $399. No one is really sure as to how much prices with jump but one can only imagine. Oddly enough, approximately 10 percent of Apple’s revenues are made through iTunes. In 2007, iTunes made a 2.7 billion dollar profit for Apple. According to The Financial Times, “Apple sold $8.3 billion in iPods last year, an 8 percent increase over the year before.”

I think that it would be in Apple’s best interest to make free music available to customers without jacking up prices. Then again, Apple has become the world’s second largest music retailer in the U.S. To my amazement, Walt-Mart Stores Inc is the world’s largest music retailer.

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Finally, Paul McCartney has signed a $400 million deal, which will see the Beatles catalog make its way to iTunes, at long last.

Paul McCartney has signed a $400 million deal, which will see the Beatles catalog make its way to iTunes, at long last. Though McCartney will probably make off with the lion’s share of the cash sum, Ringo Starr and the families of the late John Lennon and George Harrison will also benefit. Micheal Jackson, EMI and Sony will also be paid, as they each own a share in the back catalog. McCartney may actually have to pay out a little more on his divorce settlement because of the deal. How that works is anyone’s guess, but you gotta feel sorry for him; having to share all those millions is just plain malicious. Efforts to clear the Beatles-related music for digital distribution have been previously held up by a long-running trademark feud between iPod\iTunes-owner Apple Inc. and Apple Corps., the Beatles label. The two sides finally settled the dispute, opening the door to clear the catalogs for distribution via iTunes and other digital retailers.

United Press International

Pepsi Giveaways

January 18, 2008

So while scrolling Chris Anderson’s The Long Tail, I found something which caught my eye. And yes, it has to do with music. Honestly, I can’t help it! I’m trying to get help…Anyway, apparently Pepsi is going to launch what the company’s deeming “the largest promotion [they’ve] ever done”. Basically the article summarizes that for the next PepsiStuff giveaway campaign (starting February 1st), purchasers will be able to gain points with each Pepsi product purchased which can be added toward getting clothes, electronics, DVDs, CDs, and MP3s from Amazon’s music catalog. This sounds pretty cool!

 

I couldn’t help but connect this article with another I had just skimmed from Seth Godin. I started wondering if perhaps this new giveaway campaign is a bit of a gimmick, for both the highly competitive beverage provider, Pepsi, and Amazon’s music catalog; a new addition to the popular website most likely to compete with Apple’s iTunes.  Will this cause problems for iTunes? They already have other problems to worry about from Napster.

What does everyone think about this new campaign? Do you see this Pepsi campaign as another gimmick? Or will the joint venture turn profitable results for the two companies? Is everyone excited about getting “free music” while drinking their Pepsi products?  I am!

 

Maybe Pepsi should try sticking a Pepsi can to the top of a car for advertisement.

Tasia