updated 8/24/2004 8:40:24 AM ET 2004-08-24T12:40:24

RealNetworks Inc. will begin offering some university students its digital music subscription service at a steep discount in an effort to stem illegal downloads and attract long-term customers.

The Seattle-based company said Monday that it had struck deals with the University of California at Berkeley and the University of Minnesota system to offer its standard Rhapsody service to students for between $2 and $3 a month.

The service, which normally costs $9.95 a month, allows users to play more than 700,000 songs on demand. Subscribers also can burn songs onto a CD for 79 cents apiece.

Richard Wolpert, RealNetworks chief strategy officer, said the company worked with record labels to make the cheaper service feasible. He said it will still be profitable.

Wolpert said the company also hopes to attract more universities to the deal.

Roxio Inc., the company behind the Napster 2.0 online music service, also has struck deals with some universities to provide discounted services.

Separately, RealNetworks also said Monday that customers had downloaded more than 1 million songs during the first seven days of a special promotion in which the company slashed the price of its songs to 49 cents apiece. Wolpert said that’s a “severalfold increase” over its normal weekly sales but would not elaborate.

Wolpert said the promotion, which began last week, is expected to last another week or two. It’s part of RealNetworks’ effort to promote technology that allows songs purchased through its online music service to be played on Apple Computer Inc.’s iPods.

Apple has previously said RealNetworks’ actions are the technological equivalent of breaking and entering.

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