Sony to try online music store again

Giveaway: A promotion linked to United Airlines will allow frequent fliers to exchange accumulated miles for free music downloads.

January 22, 2004|By Dawn C. Chmielewski | Dawn C. Chmielewski,KNIGHT RIDDER/TRIBUNE

LAS VEGAS - Sony will launch a new online music store this spring with an exclusive United Airlines promotion that allows those who fly the friendly skies to trade frequent flier miles for free songs.

The miles-for-music promotion would generate buzz for the new Sony Connect service at a time when everyone - from giant discounters to specialty coffee brewers - is rushing to sell music downloads.

Indeed, this may go down as the year of the great music giveaway as consumer brands tie their products to free digital downloads. Apple Computer's Steven P. Jobs triggered the trend in October when he announced a Super Bowl promotion with Pepsi to give away 100 million songs through redeemable codes on bottle caps.

Other online music stores have rushed to follow suit. RealNetworks is planning a two-songs-per-12-pack giveaway with Heineken beer, while Roxio will launch a free music promotion with Miller Brewing this summer to promote the Napster service. McDonald's told Billboard magazine that it is in discussions with an unspecified online service.

Sony Connect general manager Jay Samit said the United Airlines deal allows a legitimate online music store to compete with unlicensed but free file-swapping services like Kazaa.

"What Connect has finally done is beat the pirates at their own game to offer better-quality files without consumers' having to spend a dime," he said last week at the Consumer Electronics Show in Las Vegas.

Experts in brand marketing say such promotions are a logical evolution of the enduring partnership between rock music and brands courting young consumers. Music confers a hip, cool image on a product - be it beer, burgers or bonus air miles. Budding online services, such as Apple's iTunes Music Store, get to promote their wares on another company's advertising budget. And the promotions underwrite the cost of giving away free music.

"The toughest thing you can get anyone to do is take that first step," said Peter Sealey, a marketing professor and co-director of the Center for Marketing and Technology at the University of California, Berkeley. "That's why Procter & Gamble does sampling - a new bottle of Tide on your doorstep.

"Now we're able to do that electronically," he added. "It's as if Steve Jobs has put a hundred million samples on the doorknobs of American households. It's a brilliant move."

The United promotion will allow the airline's 43 million frequent fliers to exchange accumulated miles for tracks through a jointly branded Sony-Mileage Plus Web site. Sony and United executives said the number of miles needed to download a song had not been determined.

"Obviously, the whole digital media revolution is extremely exciting for us," said Dave Keenan, United Airlines' vice president of loyalty services. "To bring this to the Mileage Plus membership is a real value. Sony is the market leader in consumer electronics and in music, and at the end of the day they're going to be the winner."

Sealey said the incentive for the airline is clear: The company would prefer that its frequent fliers load up on Springsteen instead of booking that free trip to Sydney.

"It just makes enormous sense," said Sealey. "It wants to burn those miles. That's a liability that hangs on their books."

Sony's first try at an online music service, the Pressplay venture started with Universal Music Group, attracted widespread media attention - and a federal antitrust inquiry - but few subscribers.

Universal and Sony sold Pressplay last May to Roxio, the Santa Clara, Calif., software firm that relaunched the defunct Napster file-sharing service as an online music store.

This time around, Sony will put some marketing muscle behind its online store, something it never did for Pressplay. And the company will attempt to leverage the popularity of its portable music players, including the venerable Walkman brand, to drive traffic to the Connect service.

Sony estimates it will have sold about 7 million music players designed to work effortlessly with the music service by the time it launches in the spring.

It's an attempt to imitate the success of Apple, which has dangled the lure of 99-cent downloadable songs to sell more than 2 million iPod portable music players. Apple's Jobs said the company sold 730,000 iPods from October - when it launched a Windows version of its groundbreaking iTunes Music Store - through last month.

"The iPod hit Sony and others in the traditional pocket-electronics industry like a ton of bricks," said Richard Doherty, co-founder of Envisioneering, a Seaford, N.Y., market research firm. "That they'd have success with Sony's own catalog was a double-whammy."

Sony has chosen to use its digital audio format, ATRAC3plus, to deliver music downloads. That limits music players that work with the service to Sony's products, such as the new Hi-MD Walkman digital player and the ATRAC CD Walkman players introduced at the Consumer Electronics Show.

Philips and Samsung have licensed the Sony technology for their portable music players, according to Sony.

At least one major label has yet to license its content to the new Sony service because of concerns over the format, according to record label sources.

One analyst said Sony's decision to embrace its format over Microsoft's widely deployed Windows Media Audio or Advanced Audio Coding licensed by Apple and RealNetworks could cause confusion among consumers who have yet to buy a digital music player or experiment with a paid download service. That's because not all music players work with all services.

"Where this becomes a long-term problem is if we don't see a movement toward creating some interoperability," said Mike McGuire, research director for market research firm GartnerG2 in San Jose, Calif.

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