Bad for Business, Good for Us

By on August 17, 2004

Real is playing for keeps in music price war: Nice. This makes up for some of the focus of anger and frustration that is the Real Player.

RealNetworks today is slashing the price of a digital download to 49 cents a song from 99 cents — a bold move in the war over digital music.

Through Labor Day, Seattle-based Real also is selling most full-length albums for $4.99.

CEO Rob Glaser calls the promotion, an escalation of Real’s skirmish with industry leader Apple Computer, “the biggest music sale in history.”

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Comments

  1. dave says:

    Sounds like a desperate move trying to lure users away from other music providers. If earlier reports are correct, Apple is only making a few pennies per song selling at 99 cents, and they're only in the iTunes business to sell iPods. That means Real is losing about a half-dollar per, and they don't have hardware they're trying to sell to make up the difference.

    If they really wanted to make a name for themselves, why stop at 49 cents? Do I hear 25 cents? 20 cents? 10? Free?

    Or here's a thought; go the Columbia House route -- 10 freebies if you promise to buy 5 more later at full price. And thereafter you're signed up for a weekly or monthly download (and automatically charged for it until you tell them to stop.) That almost sounds like something that could happen!

  2. Joe says:

    Maybe the record publishers are giving Real a break on the tunes because they don't want to see iTMS with such a strong majority of the online music sales market. If iTMS has an extreme majority, then Apple can have a lot of influence in setting the price because they're the gatekeeper for the online market. If Apple and Real are competing, though, the record companies are the ones in control because they're the ones providing the songs. If the record publishers want to ratchet up the price in the future, they'll need the online store market to have a good bit of competition. Since Apple is only making a few cents a sale, and since higher prices would mean fewer sales with no bigger take for Apple, they would likely oppose any price hikes.

  3. Bernard Farrell says:

    My personal experience of the Real Audio player makes me think of it as a type of low-annoyance virus. It's always running in the background, checking for new versions, prompting me over things I could care less about. I can't delete the server because it gets recreated each time I start Windows. If they gave the music away, it wouldn't entice me to download it.

  4. Joe says:

    Well, I'd call it more of a high-annoyance virus. Most actual virii attempt to hide themselves from the user. =) RealPlayer is more like popups that show up even when the browser is off. I'm encouraged by the idea of their open-source Helix technology, which will allow people to write non-retarded RealPlayers.

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