September 9, 2004 5:31 AM PDT

Real curtails half-price music sale

RealNetworks is closing down its half-price online music sale for all but a handful of songs that will continue to sell for 49 cents apiece.

The company on Thursday labeled its music promotion a success, with more than 3 million singles sold during the three-week campaign. The aim was in large part to highlight its new "Harmony" technology that allowed songs sold through RealNetworks' store to be played on Apple Computer's iPod, despite Apple's opposition.

"It was very successful for us in terms of signing up thousand and thousands of new customers," RealNetworks Chief Strategy Officer Richard Wolpert said.

The digital media company launched its promotion in mid-August, slashing the prices of hundreds of thousands of songs and albums in its catalog.

The marketing campaign came at an important time to keep RealNetworks in the public eye. Much of music market focused on the new rivalry between Apple and Microsoft's new music store, which launched last week.

Apple has established its iTunes store as the dominant force in the digital singles business, and many analysts say the next year could be difficult for second-tier players lacking Microsoft's deep pockets. Analysts said the RealNetworks promotion and its Harmony technology is likely to keep them high in consumers' minds for a while.

"It helped push Real back to the forefront, and reminded people that they are indeed a player here and are not willing to roll over in the wake of Apple and Microsoft," Jupiter Research analyst Michael Gartenberg said.

The company has a long way to go to catch Apple, which has said it has sold more than 3.3 million songs in a week during one of its peak periods. However, RealNetworks says it also relies on its Rhapsody subscription service, which has considerably higher profit margins than do individual song sales.

The company said it will maintain an ongoing 49 cent sale for a list of 10 songs a week, jointly chosen by editors at Rolling Stone and RealNetworks.

2 comments

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$4 million in losses for 2,000 customers
Good math there - Real.
Posted by jbelkin (167 comments )
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$4 million in losses for 2,000 customers
Good math there - Real.
Posted by jbelkin (167 comments )
Reply Link Flag
 

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