IE 11 is not supported. For an optimal experience visit our site on another browser.

RealNetworks slashes online music prices

/ Source: The Associated Press

For more than a year, Apple Computers Inc. enjoyed singular success selling songs exclusively to users of its iPod portable music player. Now, it’s got rival RealNetworks Inc. trying to lure iTunes customers away.

Last month, Seattle-based RealNetworks fired the first shot at Apple, announcing that it had developed technology that allows songs purchased through its own online music services to be played on iPods. On Monday, the company said it would temporarily slash its price for song downloads to 49 cents — 50 cents less than iTunes.

The promotion, which begins Tuesday, coincides with a series of print ads meant to show iPod users they have an alternative to Apple’s iTunes Music Store.

The sale, which also features full-album downloads for $4.99, $5 dollars less than iTunes, is only slated to last a limited — though unspecified — amount of time.

Then there’s the ads, featuring an iPod-as-padlock with its lock in the open position and the tag line “Half the price of Apple. Welcome to freedom of choice.”

Despite all that, RealNetworks claims it’s not targeting Apple specifically, only pursuing its goal of making its service compatible with as many digital players as possible.

A spokeswoman for Cupertino-based Apple said Monday that the company would have no immediate comment.

RealNetwork’s campaign and price promotion are likely to add to the public acrimony between the two companies.

Apple has accused RealNetworks of using the “tactics and ethics of a hacker” to circumvent the iPod’s internal copy-protection software, which had limited the market-leading music player to holding songs downloaded from iTunes or in the generic MP3 music format.

Josh Bernoff, an analyst with Forrester Research Inc., said RealNetwork’s strategy had potential to pay off in the short run.

“The people who are using iTunes are going to be influenced by this, and the reason is they’re locked in,” Bernoff said. “Apple is in the process of solidifying and creating a monopoly in digital music and this format compatibility issue is the way they lock people in.”

Any gains that RealNetworks makes on the cheaper price of its song downloads may not last, however.

“They won’t be 49 cents forever,” Bernoff said. “They will probably lose somewhere in the range of about $2 million between now and when the promotion is over, and that has to stop because it’s no way to run a business.”