It appears the online music-download providers are trying to play up to
customers with a good old-fashioned pricing war.
The first volley was fired by Apple Computer Inc., which rolled out its
iTunes Music Store (www.apple.com/music/store) new
download service last month, offering customers the ability to burn songs to CDs
at 99 cents per title, with no monthly subscription fee.
The coalition backing the Rhapsody subscription digital-music service fired
back Wednesday, announcing that it would drop the cost to burn songs to CDs from
99 cents to 79 cents per track -- the lowest rate available to U.S. customers,
Rhapsody is the brainchild of online music outlet Listen.com (www.listen.com), which is in the process of
being acquired by RealNetworks Inc.
It has cut distribution deals with MSOs including Cablevision Systems Corp.,
Charter Communications Inc., Time Warner Cable and RCN Corp., as well as
Internet-service providers Lycos Inc., Sprint Corp. and Verizon Online.
In a related announcement, RNI announced that it would begin distributing the
Rhapsody service to its streaming-media customer base while phasing out the
MusicNet (www.musicnet.com) service.
RNI holds a minority stake in MusicNet, an online download service launched
one year ago with record labels Warner Music, Bertelsmann AG and EMI Group Plc.
Although MusicNet snagged $10 million in new funding last week, the service has
struggled to find customers.