April 28, 2004 12:38 PM PDT

Pepsi's iTunes promotion goes flat

Apple Computer said Wednesday that about 5 million free songs have been given away through a Pepsi promotion, far fewer than the 100 million tracks that could have been redeemed.

An Apple representative said the music giveaway was probably the biggest ever of its kind but admitted that the company gave away fewer songs than it had intended.

"We had hoped the redemptions would have been higher," said Katie Cotton, Apple's vice president of worldwide corporate communications. Customers with winning bottle caps have until Friday to redeem their free music tracks.

Cotton noted that the yellow-capped bottles with the Apple song codes were late in reaching some key markets. However, Cotton said the promotion did introduce a lot of people to iTunes.

The 5 million free tracks Pepsi gave away were included as part of Apple's statement earlier Wednesday that it has sold 70 million songs in the first year of its music service. Apple said last fall that it hoped to distribute 100 million tracks in its first year, but when that figure was calculated, it was expected that more winning bottle caps would be redeemed.

Customers who wanted the codes did find a way of boosting their odds, which were supposed to be 1-in-3 for getting a free song. Fans discovered that by tilting the bottle at a certain angle, they could tell whether the bottle was a winner.

Overall, Apple CEO Steve Jobs said Wednesday that he was pleased with the rate at which Apple's music store is growing.

"We feel we have a lot of momentum," Jobs said on a conference call, noting that the company is now selling music at a rate of 2.7 million songs per week, or 140 million songs per year. That's up slightly from the rate Jobs touted in March, when the company had sold 50 million tracks.

Besides the Pepsi deal, there is also a smaller giveaway going on this week in conjunction with Ben & Jerry's. The ice cream maker is offering 50,000 free tracks--one to each customer who pledges this week to vote in the presidential election.

Apple has also launched its own giveaway, offering a free track each day this week and then, in the future, one free track per week. Cotton said that promotion is being done with the participation of the record companies, but she declined to discuss financial details.

Analysts praised that move, saying the promotion should help build awareness and draw in new customers.

"Whenever anyone offers something free, your ears perk up," said Technology Business Research analyst Tim Deal.

4 comments

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Effective, Timely Distribution Would Have Helped
I would have been happy to have participated in boosting the success of Pepsi’s campaign, but their distribution network appears to have failed them, at least in San Antonio, Texas. Aside from a few Diet Pepsi drinks with the tell-tale yellow caps (no, thank you), I never once saw an iTunes Pepsi bottle.
Posted by (4 comments )
Reply Link Flag
Los Angeles, too
The promotion was completely hindered by Pepsi's inability to
get bottles out in the market. I didn't see one bottle in Los
Angeles until about two weeks ago, and I hear they were havign
similiar problems in New York. This must be driving Steve
CRAZY, having to rely on Pepsi's infrastructure only to have it fail
so spectacularly. I wish they would extend the promotion six
weeks.
Posted by (1 comment )
Link Flag
Long Island New York, too.
The I started seeing the iTunes bottles about 3 weeks ago on Long Island and at that they have been extremely hard to find. In essence, our area only had about 3 1/2 weeks to find the specially marked bottles and redeem free songs. That's bad considering the promotion was supposed to start on February 1rst!

At least I was still able to get 4 free songs.
Posted by justinpowell (11 comments )
Link Flag
Kentucky got duped
I live in Kentucky and the Pepsi bottles failed to ever appear o
n the shelves. I didn't even see any in Lexington, KY. Kind of t
icked me off to think that we couldn't get them. And I drink P
epsi every day. So much for being true to your faithful c
ustomers.
Posted by thelonman (10 comments )
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