RealCheap Music

from the price-wars? dept

theodp writes “RealNetworks will kick off a high-profile digital music marketing campaign Tuesday, offering song downloads for 49 cents and half-price albums as it highlights the new iPod-compatible technology that raised Apple’s ire.” It’s been odd that there really hasn’t been much of a pricing war in the digital music space, considering the vast number of “me too” plays out there. While the record labels have (for the most part) set the floor on pricing, it makes sense that sooner or later companies are going to start forcing down the prices for the sake of competition — especially if they’re looking at the music as something of a loss leader, and not as a profit center. So far, the price drops have been in the form of promotions (free music with Pepsi, McDonald’s, Heineken, etc.), and now the pricing is getting more directly aggressive for the sake of promotion. Sooner or later, someone is going to drop the prices lower for good.

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Comments on “RealCheap Music”

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Anonymous Coward says:

No Subject Given

This is either genius by Real or desparation. To come out and say a promotion is going to impact your earnings in a significant way (yes, 1 cent is significant) is no small thing for a public company.

As you state, this is a ‘me too’ kind of business so I’m not sure what Real really hopes to gain out of this as the profits, is any, seem small. Maybe they are taking Apples rebuff a bit too personal and allowing it to blur their judgement.

If I was a Real shareholder I don’t know if I’d be pissed or buying more shares. hmm …. based on a Quick quote I just got, I think shareholders are leaning toward pissed.

Dave B. says:

No Big Deal...

Real’s harmony and price cuts is a non-event. iTunes/iPod marriage is all about convenience. The reason most use iTunes IS NOT because free MP3 rips on PTP nets are wrong or of poor quality, but because iTunes is incredibly integrated, convenient and reliable. Price and compatibility will not change that equation. Most iPod users are not asking for choice (yet), so Glaser has jumped the gun in a desperate and doomed bid to save Real. iPod users are simply not thinking that far ahead. When Apple locks out Real, few iPod owners will notice except less than one dozen vocal media types who actually never used Real, but are in love with the idea. Glaser should check back in about two years if he still has a job. Real Who?

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