Our RealPlayer Music Store is a pure example of the second model. As part of our introduction of our Harmony technology (which allows digital songs to play on a virtually any popular MP3 player), we put every song in the store on sale at 49 cents. The promotion was a smashing success, resulting in us selling over 3 million songs in about 3 weeks.
and
While wholesale prices vary depending on the label, today most labels charge approximately 65-70 cents per song. Publishing costs a fixed rate of about 9 cents per song. And the other costs average a few pennies per song. Thus, as we have made clear, selling every song in our store for 49 cents a song is not sustainable unless/until the labels change their pricing philosophy.
That 3 million song block sold cost them between $810,000 and $960,000.
I have to wonder if they really get enough other new sales to offset losses like that. It does seem that they are making money, but some of that money is from premium services.
Digging themselves a hole? (Score:4, Interesting)
Our RealPlayer Music Store is a pure example of the second model. As part of our introduction of our Harmony technology (which allows digital songs to play on a virtually any popular MP3 player), we put every song in the store on sale at 49 cents. The promotion was a smashing success, resulting in us selling over 3 million songs in about 3 weeks.
and
While wholesale prices vary depending on the label, today most labels charge approximately 65-70 cents per song. Publishing costs a fixed rate of about 9 cents per song. And the other costs average a few pennies per song. Thus, as we have made clear, selling every song in our store for 49 cents a song is not sustainable unless/until the labels change their pricing philosophy.
That 3 million song block sold cost them between $810,000 and $960,000.
I have to wonder if they really get enough other new sales to offset losses like that. It does seem that they are making money, but some of that money is from premium services.