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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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.
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Enjoy
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cheap music
I thought it was a brilliant business model, only charging full price to people who want full quality.
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Other than that, $.01/Mb is a great deal. Most full albums cost less than $1.00.
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No Big Deal...
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