Amazon And Pepsi To Offer Free Music

Amazon.com and Pepsi have teamed up for a new free music cross promotion that will see Pepsi drinkers earn free music with Pepsi purchases.

“Pepsi Stuff” is billed as a “massive collect-and-get program” where “consumers can download the most DRM-free MP3 music available anywhere.” In layman’s terms, drink lots of Pepsi, get DRM free music for free on Amazon.

Starting February 1, Pepsi users must “bank” their points on PepsiStuff.com to redeem them for music on Amazon MP3.

Cross promotions of this kind aren’t new, but it does show the seriousness of Amazon to promote its DRM free music store to a wider audience (Pepsi has previously given away iTunes downloads). It was only 12 months ago that we wrote about the inevitable death of DRM, yet one year later in 2008 the market is now focused on which DRM free music provider comes out on top, and we wouldn’t have it any other way. Hopefully the increasingly cut-throat competition will result in downwards pricing pressure as well in the coming months.

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Amazon Convinces Sony To Go DRM-Free

Amazon.com on Thursday announced a new deal with Sony BMG to sell its digital music without copy protection. Sony is the last of the major record labels to jump on the Digital Rights Management-free bandwagon.

Amazon's DRM-free MP3 digital music store will now feature music from all four major labels -- Sony, Universal Music Group, Warner Music Group and EMI -- as well as more than 33,000 independent labels. The MP3 songs are playable on virtually any digital music-capable device, including PCs, Macs, iPods, Zunes, Zens, iPhones, RAZRs and BlackBerrys. Sony's music will debut on Amazon.com later this month.

"We are excited to be working with Amazon as they continue to build new markets for digital music," Thomas Hesse, president of Sony BMG Music Entertainment's Global Digital Business & U.S. Sales, said in a statement. "We are constantly exploring new ways of making our music available to consumers in the physical space, over the Internet and through mobile phones, and this initiative is the newest element of our ongoing campaign to bring our music to fans wherever they happen to be."

Moving In on iTunes

Launched in September 2007, Amazon MP3 offers the largest selection of a la carte DRM-free MP3 music downloads, which now includes over 3.1 million songs from more than 270,000 artists. Every song and album in the Amazon MP3 music download store is encoded at 256 Kbps to deliver high audio quality.

Amazon.com's pricing scheme is slightly lower than iTunes in many cases. iTunes offers a standard 99-cent price tag on its singles. Most songs available on Amazon MP3 are priced from 89 cents to 99 cents, with more than 1 million of the over 3.1 million songs priced at 89 cents. Most of the top 100 best-selling songs are 89 cents; most albums are priced from $5.99 to $9.99; and most of the top 100 best-selling albums are $8.99 or less.

Amazon makes digital music downloads available through its 1-Click shopping feature and offers an Amazon MP3 Downloader that streamlines downloads to PCs or digital devices.

Path to Redemption?

With a rapidly changing record industry, Sony seemingly had little choice about its move to DRM-free digital music downloads. According to music industry news site Billboard.com, total album sales last year dropped nearly 15 percent. Rap album sales suffered dramatically with a 30 percent sales drop.

Earlier this week, Sony debuted MusicPass, a $12.99 gift card sold at retail stores that entitles the buyer to download a DRM-free album of MP3s online. MusicPass and the Amazon.com deal are both moves to help Sony compete with other labels and services that have already begun selling DRM-free MP3s on Amazon and elsewhere.

"Sony had issues with trying to balance the protection of its intellectual property with being consumer friendly. Sony is realizing that it's just not working," said Tim Deal, an analyst at Pike & Fischer. "Sony still needs to come a long way to be more pro-consumer and less guarded about its content."

Sony should have been on the forefront of the digital music revolution, Deal noted, but has failed on a number of levels, including poor marketing, mismanaged product introductions and coming late to the table with digital downloads. "Sony's concern for Digital Rights Management was so all-consuming that it put a bad taste in consumers' mouths," Deal said. "Perhaps offering DRM-free music is part of their path to redemption."

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Amazon's Kindle: The iPod of E-books?

It's the gadget of the day: Amazon's homegrown Kindle, the latest attempt to make the e-book reader from quirky oddity into something for the mainstream. Will it fly this time time around? Amazon's got a long road ahead of it, but first appearances would seem to indicate that this is the best e-book reader to date.

Amazon is unabashedly looking to the iPod for inspiration, attempting to make a piece of hardware that needs minimal expertise to run and that ties specifically to its own store, in this case, Amazon.com, which will offer 88,000 book titles for sale at launch. Even better, the Kindle is designed to be usable sans computer. It connects directly to a special Sprint-powered cellular network called Whispernet (not Wi-Fi) and lets you download directly from the web. However, there are no additional monthly service fees for the privilege.

The big question with these devices is always the screen. Kindle uses the same display technology that the similar Sony Reader uses, called E-Ink. The screen looks as much like paper as electronic displays get; it also allows for exceptional battery life since, once a page is generated, it requires no additional power to keep it displayed.

But there's a dark side of Kindle, which is already drawing heaps of abuse for its design, which can charitably be described as heinously ugly. The vaguely trapezoidal gizmo with oddball keys certainly doesn't share any kinship with the elegant iPod, but iPod 1.0 was hardly the beauty it's become of late. I'm going to chalk it up as a first stab at a design, and I'm all but certain the 2008 version will look nothing like it.

Weighing just 10.3 ounces, the Kindle is lighter than most paperbacks, which should make extended reading no problem. You can store hundreds of titles on its built-in memory and add SD cards for additional room. Titles you buy ($10 for best sellers and new releases) are backed up on Amazon, so even if you have to delete one, you can always download it again later. And if books aren't your bag, the Kindle also does blogs, newspapers, and more (though for additional fees). There are also some very basic music and web browsing features.

So will Kindle fly? People who aren't complaining about the design will likely complain about the price. Even if you're saving $6 off the purchase of each book, it will take more than 60 purchases for the $399 Kindle to pay for itself. Consider also the Sony Reader, which has been a modest success: Sony claimed it was "exceeding expectations" and that e-book sales were outpacing music sales at its online store, as of January 2007. That said, who buys music from Sony's online store? Sony reportedly has a new, wireless Reader in the works, too, so there appear to be at least some legs in this market.

The jury's out on whether Kindle will really make an impact with consumers, but Amazon's launching it at the perfect time, and tying it to the world's largest bookstore is certainly a smart move. The price is the real trick: Many Amazon shoppers are loyal to the site because of its exceptional bargains, but $399 puts it at (or above) the price of most gaming consoles. So would you like an e-book reader or a Nintendo Wii underthe tree this year?

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