RealNetworks Inc will begin selling Internet music at half price today as it steps up efforts to draw customers from Apple Computer Inc's iTunes site.
The promotion coincides with the release of RealNetworks's Harmony software, which it designed to allow users to download music to Apple's iPod digital music player and other devices, said RealNetworks senior vice president Dan Sheeran.
RealNetworks will charge US$0.49 a song and run newspaper ads highlighting the alternative to Apple, which has refused to open its iPod to competitors.
Harmony was designed without Apple's cooperation.
Becoming a second option for iPod users could catapult RealNetworks' store to No. 2 in online music sales behind iTunes, which has sold 100 million songs, said Josh Bernoff, an analyst at Forrester Research Inc.
"This market now is iTunes and the seven dwarves," said Bernoff, who is based in Cambridge, Massachusetts.
"There are very few people buying music from the Real store. They are likely to end up as the No. 2 store because of this," he said.
RealNetworks had charged US$0.99 a song. Apple also charges US$0.99.
Wal-Mart Stores Inc, Roxio Inc and Time Warner Inc are among companies also selling music online. Microsoft Corp plans to later this year.
The price cuts will probably cost RealNetworks US$0.25 to US$0.30 a song and about US$2 million in total, Bernoff said.
RealNetworks was scheduled to kick off the discounts, with a full-page advertisement in the New York Times yesterday.
The ad notes that RealNetworks's songs are available at "half the price of Apple" and shows a picture of an Apple iPod made to look like an opened lock. It carries the tag line "Welcome to freedom of choice."
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