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2004 to bring loads of 'free' Net music


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NEW YORK (Reuters/Billboard) -- The great digital music giveaway is about to begin. In the new year, some of the world's biggest brands will promote their products and services by doling out millions of free downloads through alliances with digital music services.

"You're going to see lots of free music given out via third-party companies," buymusic.com founder Scott Blum says. "It's not going to be Apple and iTunes driving the business. It's going to be companies like Pepsi and other third parties that are promoting digital music on bottle caps and on labels."

Indeed, Apple Computer has inked a deal with Pepsi to give away 100 million iTunes downloads in a promotion that kicks off in February with a Super Bowl ad.

And Miller Brewing will give away thousands of Napster-branded digital music players and downloads next summer as part of a new marketing alliance between the beer maker and Napster parent Roxio.

Other beverage suppliers, MP3 player manufacturers, airlines and credit card companies also are looking to get in on the act. Even fast food giant McDonald's confirms it has discussed marketing possibilities with a number of online music distributors.

Seeking connection

The promotions come at a time when brand marketers, particularly beverage companies, are looking to establish broad connections between music and their products -- a strategy well-served by digital music giveaways.

Music giveaways are understood to foster customer loyalty. What's more, they provide consumers with powerful incentives to use the related products, executives say.

The trend has major implications for the nascent digital music business.

Campaigns from Pepsi, Miller and others can educate consumers about online music in a way that is outside the scope of most digital music companies, Apple aside.

Quite simply, brand marketers have much bigger coffers to devote to marketing and promotion than upstart Web firms.

"We're going to drive a lot of trials of the iTunes experience," says Katie Lacey, VP of colas and media at Pepsi-Cola North America. "I think that will be a revolutionary promotion and a revolutionary opportunity."

Through its own marketing initiatives, Apple has helped drive sales of more than 25 million downloads since April. However, Pepsi is giving away four times as many tracks. And it's plugging iTunes on 300 million bottles.

Apple CEO Steve Jobs is on record as saying that the promotion "will go down in history as igniting the legal download market."

Some brand marketers are even going to try selling downloads. Pepsi rival Coca-Cola has unveiled plans to launch a download store in Britain. Mycokemusic.com will go live in January, offering 250,000 new and recent hits from 8,500 acts, according to the company. Specific licensing deals have not been announced. Tracks will sell for 99 pence ($1.71) each.

The site is expected to have a broad promotional component as well. To support the launch, Coca-Cola is planning a yearlong promotional campaign that will include free, exclusive tracks.

In the U.S., Coke sponsors a promotional music site called cokemusic.com, which highlights new music. No music is sold through the destination.

Sean Ryan, VP of music services at Real Networks, acknowledges that brand marketers are looking at all sorts of models for hitching their wagons to digital music. He says some companies are considering sponsorship relationships with music programming along the lines of the soap sponsorships that drove early daytime TV programming.

What all of this means for the value of the digital music market -- and whether the campaigns will inspire greater numbers of consumers to start paying for music online -- remains to be seen.

Emotional ties

Digital download giveaways are just the latest wrinkle in a deepening relationship between the brand marketing community and the music industry.

Youth-oriented lifestyle brands like to piggyback on the strong emotional ties that young consumers have with their favorite songs and artists.

Beverage companies -- such as soda companies and beer makers -- have been particularly keen on using music to boost consumer affinity with their brands and are forming more formal relationships with music companies to ensure they have access to relevant music.

During the past year, Pepsi has worked closely with Sony Music Entertainment on marketing initiatives. Coca-Cola has a similar relationship with Universal Music Group, particularly with Interscope.

"The current business environment lends itself to partnering," says Geoff Cottrill, group director of music for Coca-Cola North America.

The increasing synergies come at a time when record companies -- facing slumping sales -- are looking to promotional platforms beyond radio and music video networks to plug their acts. Tying in with a brand marketer can be a great opportunity to push music through nontraditional marketing channels, record executives acknowledge.

"There's a ton of opportunity, and we're trying to push the envelope," Pepsi's Lacey says.

Accounting for taste

The difference between current music-marketing initiatives and campaigns of old is the way marketers approach the industry.

More often than not, the focus is now on music as a whole rather than on a particular artist. That's because consumers listen to many artists within multiple genres, marketers say.

"Music taste today is like a fingerprint. Everyone's taste is different, and youth pride themselves on having personal music taste. So for us to focus on one artist or one type of music, we would be missing the bigger picture -- that people love music in general," Cottrill says.



Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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