Apple Loses To Amazon At Super Bowl XLII
01.16.08 - 11:35am
Four years ago iTunes was just a fledgling set to rise to unparalleled heights. At the time the Super Bowl was a huge booster for iTunes which combined with Pepsi launched a commercial set to Greenbay’s version of the song “I Fought the Law” encouraging buyers to buy legally online from iTunes rather than illegally downloading tunes from various sources.
Over 1,000,000 songs from iTunes were given away free in the Pepsi promotion and iTunes has then grown expeditiously year after year, becoming the extreme dominant in the download market and helping to propel iPods to explicit dominion.
Today however, a new era is emerging and rather than Apple being the underdog to Microsoft, with an almost cult like following, Apple is now the one on top and as the new “King of the Hill” is the one everyone wants to overcome.
It is why for this Super Bowl Apple is being left out with instead Pepsi setting a closely similar promotion to the one touted four years ago but this time with Justin Timberlake singing and Amazon’s music store being touted as the place to go. Over a billion songs will be given away in the Pepsi/Amazon promotion as well as other prizes including DVDs, Amazon Unbox TV downloads, electronics, apparel, and CDs. Amazon and Pepsi are also making it abundantly clear that the songs can be played on any MP3 player, iPod, iPhone, or any digitally capable device, with no restrictions.
Just last week Amazon secured all four major music labels with BMG coming over to sell their music DRM free on the site. Amazon now has over 3 million DRM free songs. Apple has more songs, but has only secured DRM free music through EMI. The labels have joined with Amazon over Apple in an effort to break Apple’s hold on the music and thus break Apple’s hold over deciding prices that the music labels want to regain control over.
The shift to no DRM was called for by Jobs in an open letter on the Apple website back in February. It was a call that was sorely needed, and Apple began the first stance setting up a contract with EMI selling all their songs DRM free. Since then however, Apple has not added any more DRM free songs, selling all other music labels locked down. This is not Apple’s or Steve Jobs fault but rather the record labels who wish to break the Apple iTunes stronghold on the market. One senior executive at one of the major record companies told the New York Times that he ‘was prepared to keep copy restrictions on his label’s songs on iTunes for six months to a year till Amazon was able to establish itself’. He spoke anonymously since he was concerned of irritating Mr. Jobs.
The promotion which begins on Super Bowl Sunday, will involve consumers redeeming points received when Pepsi drinks are purchased. Since most people don’t ever bother redeeming the points they do expect that only a small percentage of the billion songs will ever be redeemed. The Superbowl publicity and the marketing from both Amazon and Pepsi could help Amazon set a place in the market next to the leader, iTunes, and could help the record labels regain control over how much money they sell their downloads for. Currently the downloads are being sold for .10 cents less through Amazon than through iTunes.
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