More of my sites

WinInfo Daily News
SuperSite for Windows
Windows IT Pro Magazine
Connected Home
Thurrott Dot Com
Windows Weekly at TWIT

About this site

For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Thursday, September 09, 2004

RealNetworks Promotion Garners Sales of Over Three Million Songs

Wall Street Journal: "RealNetworks Inc. plans to announce today that it sold over three million songs online as part of a cut-rate promotion that is now ending. The Seattle-based company, targeting market leader Apple Computer Inc., charged 49 cents a song and $4.99 an album for music sold tunes via its RealPlayer Music Store over a period of about three weeks. That compares with a standard price of 99 cents a song and $9.99 an album for Apple's iTunes Music Store and most other sites. 'It was a very economical and efficient way to introduce consumers to our service,' said Rob Glaser, chief executive officer of RealNetworks. The company estimates that it gained market share against Apple as a result of the music sale. An Apple spokeswoman was not immediately available for comment. Mr. Glaser said the company lost about 25 cents for each song it sold to people who don't already pay for a separate subscription offering."

Wait a second. They reduced the price 50 cents and only lost 25 cents per song? That means Real actually makes a whopping 25 cents per song at the normal price. Since Apple breaks even on its music service, that suggests Real is capable of not just making a lot of money from its a la carte service, but that it can make a lot more money than Apple, even if it sells far fewer songs. I guess that kills the "you can't make money on online music sales" argument, which, naturally, was based solely on Apple's inability to do anything efficiently. This further suggests that other clueless assumptions about Napster and other music stores are equally bogus. Interesting.

Oh, and the sale is effectively over...

"Starting today, [Real] plans to offer only the top 10 most popular songs on its site and in industry rankings for 49 cents each. The rest of the more than 625,000 songs in its store will revert to their 99-cent price tag, with most albums going for $9.99."

[ Posted at 8:10 AM | Permalink ]