Monday, June 30, 2008

snapshot 6/30/08

Rhapsody to challenge iTunes by embracing the iPod
http://bits.blogs.nytimes.com/2008/06/30/rhapsody-runs-hard-just-to-stay-in-place/index.html
Digital music seller Rhapsody is launching a $50 million marketing assault on Apple's iTunes, offering songs online and via partners including Yahoo Inc and Verizon Wireless, Rhapsody said on Monday. The songs will be sold in MP3 format, which means users of the Rhapsody service will be able to play them on iPods.

Rhapsody also will be the music store back-end to MTV's music Web sites and iLike, one of the most widely used music applications on social networking site Facebook. Rhapsody executives describe the strategy as "Music Without Limits." They said it would be backed by a marketing blitz worth up to $50 million in media space over the next year in part by leveraging co-parent MTV's TV networks and Web sites.


Apple's Complete My Album emerges as marketing tool
But in the past few months, labels and artists have begun releasing multiple tracks in advance of an album's street date to promote new releases, relying in no small degree on Apple's iTunes Music Store's Complete My Album feature to convert them into full-album sales -- in some cases with striking effectiveness. Despite the entire album's being leaked online just weeks before its availability, "Tha Carter III" racked up first-week sales of more than 1 million. What's more, 10 percent of the album's sales were digital, up from less than 1 percent for Wayne's past titles. And the most eyebrow-raising statistic? Fifty-two percent of the album's sales on iTunes came through Apple's Complete My Album function.

The Complete My Album feature is simple: iTunes users who buy single tracks from any given album can opt to purchase the remaining tracks on the set for a prorated price. Apple introduced the option at the end of March 2007 and since has seen conversion rates of around 10 percent. But those rates could start climbing now that acts like Lil Wayne, Jason Mraz, the Cure and the Jonas Brothers are using the feature as a marketing tool. Rather than just releasing singles digitally in advance and leaving fans to figure out for themselves how to fill in the blanks when the full album is released, these acts are encouraging the practice by explaining how it works via their iTunes profiles, MySpace pages and personal Web sites.


Verizon Wireless gets Rhapsody music subscriptions
Verizon Wireless is introducing Rhapsody's subscription music service Monday, allowing its customers to download as much music as they want to their phones for $15 per month. The service will work with seven current handsets and three to be launched soon, including the third version of the popular music-oriented LG Chocolate.


Open an account and your first album is on us
Shopping for music online just got easier. The new Rhapsody MP3 Store lets you listen to entire songs before you buy them*, provides recommendations, and delivers high-quality MP3s that can be played on your iPod or any other MP3 player. If you’re one of the first 100,000 to create an account by Independence Day, we’ll automatically apply a $10 credit to your first album purchase. The credit must be used by midnight Pacific time, July 4, 2008 – so sign up and start shopping today. Limit one per household. *Full-length song plays are limited to 25 per month for non-Rhapsody members.


A Digital Music Store That Sells More Than Just MP3s
Hot Topic, a chain of stores that sells clothing and accessories inspired by music and pop culture, plans to start a digital music store called ShockHound. By the time it is introduced in August, ShockHound will have permission to sell MP3s from at least three of the four major labels, the company says, as well as hundreds of independent labels. Hot Topic is starting ShockHound with a very different strategy from its competitors. Like most online stores, it plans to sell songs for 99 cents and albums for $9.99, prices at which profit margins are low. But just as Apple uses the iTunes store to drive sales of high-margin iPods, ShockHound is trying to use MP3s to help sell the kind of profitable band T-shirts and accessories it carries in stores.

“For us, music merchandise is where the profit is,” said Hot Topic’s president, Jerry Cook. “The reason we carry CDs in the stores is that to be in a music-centered business and not have music would be a contradiction. And you can’t be an online music store and not have MP3s.” Unlike Hot Topic’s stores, which favor CDs and clothing from bands identified with its suburban goth aesthetic, ShockHound will sell music and merchandise from a wide array of acts in every genre. It expects to sell T-shirts from more than 1,000 bands, as well as a wide selection of other kinds of clothing, accessories and vinyl records.


Project Red lays groundwork for subscription music service
Project Red is going to be providing some music for that Bono-approved iPod Nano of yours. The high-profile nonprofit, which donates a chunk of profits to combat AIDS in Africa, will be launching a subscription music service this fall. The as-yet-unnamed service will launch in September, according to The New York Times, and cost $5 per month.

It's structured like a newsletter: each week, members will get an e-mail with two MP3s--one an exclusive song from a well-known act and the other from an emerging artist--as well as a "Crackerjack surprise" (say, a video) and an update on how Project Red's charity money is being put to use. The songs are DRM-free, so you won't have to own a "Red" iPod in order to listen to them.

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