Universal Trials "Pay Per Download' With 99¢ MP3 Sale

by , 11:30 AM EDT, May 24th, 2002

Vivendi Universal's online division and Maverick Records are selling an MP3 for just 99¢, trialling a pay-per-download retail model. According to a ZDNet article yesterday, a remix of Meshell Ndegeocello's single Earth is offered for sale on various Universal-run sites, including MP3.com, Rolling Stone, EMusic and GetMusic. It's literally as simple as that: just pay 99 cents, and you can download it to burn or use on your computer or MP3 player. According to the article:

Phil Benyola, a digital media research associate for investment company Raymond James Financial, called the MP3 sale an "innovative" marketing maneuver. But he warned it might not be a successful one.

"It's very significant that they would endorse the MP3 format since MP3 has always been a dirty word to the labels. Up until now, everything they have offered has been a secure format," Benyola said.

But "I think you'll be able to count the number of sales on one hand," he added. "As soon as one person gets it, it's all over the (peer-to-peer) networks for free."

However, EMusic's general manager, Steve Grady, is hopeful.

"I think there are a lot of fans that are loyal to these artists and are willing to pay a reasonable price for a download or a CD."

"Sure, there is always a concern of piracy; there's always the concern of people illegally transferring things. But we feel the best way to combat that is by giving people a legitimate alternative, and this is a test to make that alternative available to them," Grady said.

You can read the rest of the article at ZDNet.com.

The Mac Observer Spin:

Mr. Grady's remarks are not too far from the truth of the matter. Despite the fact that EMusic is participating in the program, it's a good claim: the Cable & Telecommunications Association for Marketing claim that one in five American Internet users would currently be willing to pay for music and entertainment online.

Additionally, recent research by Informa Media predicts that online music subscription services will generate US$2.4 billion by 2007. This is powerful evidence for the growing desire among consumers to purchase music online by downloading it; although music piracy is a problem, the customer response to copy protection and other limitations on playback ranged from mild annoyance to mild outrage.Trying this business model could be the beginning of an online music industry that suits the record companies and the consumer, a balance that is long overdue.

Make no mistake about it: this is a very big deal in the copyright/copy protection battle, and we applaud Vivendi's decision to try this.

ZDNet: Record labels offer MP3 test for 99 cents