39;sUrge, Rhapsody, Verizon Wireless, Wal-Mart and Yahoo Music --have unveiled new forays designed to shine light on theirstruggling services in the shadow of Apple's still-dominantiTunes.
While no individual effort is likely to dislodge Apple fromits No. 1 position, all are clearly efforts to chip away at itscommanding lead. According to data from NPD Group, Applecontrols 73.7 percent of the retail digital-music market, withmore than 3 billion tracks sold since it went live. iTunes isalso the third-largest music retailer of any kind, surpassedonly by Best Buy and Wal-Mart.
REALNETWORKS, MTV, VERIZON WIRELESS
In perhaps the most significant move, the three providershave joined forces to offer one integrated digital-musicplatform that includes Rhapsody's technology and music,editorial content and playlist programming from MTV's Urge andwireless distribution via Verizon Wireless. MTV brings strongmarketing muscle -- to the tune of $230 million during the nextfive years, not to mention its on-air channels -- pluswell-received blogs and other resources that should improve onRhapsody's content. Verizon brings a mobile extension,something market leader iTunes still lacks. And Rhapsody bringsthe most popular subscription services on the market, itsexisting subscribers and back-end mobile technology.
The big bet, however, is on integration. Verizon willreplace its Web-based digital music store with the new Rhapsodyservice and will send a copy of every song downloaded to aVerizon phone to the user's Rhapsody account. And Rhapsodysubscribers will be able to transfer subscription-based musicto Rhapsody-compatible Verizon phones once they're introducedlater this year. But don't expect to download subscriptiontracks over the air from Verizon phones just yet.
On paper it's a strong alliance that emphasizes eachpartner's strengths and eliminates their weaknesses in what MTVNetworks president Van Toffler called a "perfect storm" ofcapabilities. Whether they can execute it is another story.
WAL-MART
The big-box retailer has started a public relationsinitiative to highlight the availability ofdigital-rights-management-free (read: iPod-compatible) musicfrom EMI and Universal Music Group. This is a particularly bigdeal for Wal-Mart, which has not been able to translate itssuccess as a physical retailer to digital music. While it isresponsible for about 22 percent of physical CD sales, Wal-Marthas less than 2 percent market share among music services,despite undercutting the competition on price. Protected tracksare 11 cents cheaper than on iTunes, while DRM-free tracks are35 cents cheaper.
But this probably won't matter much until Wal-Mart can sellall its music without DRM, not just music from EMI and UMG. Andthe conservative company sells only edited versions of songsthat otherwise would earn a parental advisory notice.
YAHOO MUSIC
Yahoo has unveiled plans to launch a Web-based music playerthat will allow current and non-subscribers to stream musicfrom the service without requiring them to download the fullYahoo Music Unlimited software.
While its music portal receives more than 25 million uniquehits per month, the Yahoo Music Unlimited subscription servicecontinues to struggle for mass-market attention, just likeevery other subscription service out there.
According to Yahoo Music general manager Ian Rogers, theidea is to give its broader Internet community access to thesame tools as subscribers and eventually convert them intopaying members. Non-subscribers can hear only 30-secondsamples, while members can listen to the entire track.
Reuters/Billboard
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