• by Ross Fadner , January 29, 2004

Coca-Cola Co.'s marketing alliance with Musicmatch, is only the latest deal in a wave of recent activity between fledgling for-pay music download sites and power brands. Coke on Wednesday said its Sprite brand would partner with Musicmatch, though Coke was mum on what the cross-marketing deal will entail.

Pepsi, Hewlett-Packard, and Microsoft are among big brands that have aligned with online music services including Apple's iTunes, Roxio's Napster, and RealNetworks' Rhapsody. Any brand that wants to get out in front of kids and young adults for an image of cutting-edge cool, is likely to approach an online music venue. Marketers hoping to reach elusive 18-to-34-year-old males may find them on any of the for-pay sites.

Initially, the Musicmatch deal involves only Coke's Sprite brand saying that specific details will come later this year.

Scott Williamson, a spokesman for the Coca-Cola Co. said Coke was scouting for relationships with the online music providers. "We met with each of the major digital music providers and Musicmatch was the best fit," he said, adding that music has been an integral part of Sprite's image.

"This goes beyond downloads," said Geoff Cottrill, group director, Music, Entertainment Marketing Group, Coca-Cola America. "Musicmatch's services offer richer programs like premium subscriptions, streaming radio and Artist Match, (an Internet radio station). We're particularly excited about the range of choice available to consumers-choice of control is the entertainment wave of the future across all forms-not just digital music," Cottrill noted.

Musicmatch said it has exclusive deals with Internet Service Provider Earthlink and Dell, which promotes the service on its hardware devices. Of the Coke/Musicmatch deal: "This seems to be [exactly] what Apple is doing with Pepsi," observed Phil Leigh, senior analyst, Inside Digital Media. "[That partnership] put the pressure on Coke to do something." Leigh said that the terms of the deal are too vague to know what the companies' strategies are, but he suspects it will be similar to Pepsi's bottle cap promotion that gives away free downloads from Apple's iTunes.

Leigh notes that while the Musicmatch sponsorship is important, the Apple-Pepsi deal is bigger. "[Musicmatch] has taken a very constructive step, but there are lots of other good deals out there." He cites Napster's arrangement with Penn State University, which marked the first university to sponsor a music download service, as a more significant deal. The pact gives Penn State students a free subscription to Napster and the ability to download individual tracks for a dollar.

Apple's iTunes dominates the relatively nascent music download market. According to Eric Garland, founder and CEO of Big Champagne, a provider online entertainment data, said that Apple's 30 million total music downloads commands 80 percent of the paid digital music industry. "None of the other services have released their sales figures, which I think is telling," he said. Apple's dominance of the market with its iTunes service and iPod portable downloading devices may be keeping rival services from revealing their sales figures.

Musicmatch, which started out primarily as a music software provider, reports 45 million registered software users and is currently selling downloads at a pace of one million per month. According to comScore Media Metrix, Musicmatch was by far the most visited for-pay music site in December 2003, with 6.8 million unique visitors. Musicmatch was followed by Roxio's Napster with 3.8 million visitors, RealNetworks' Listen.com properties with 1.9 million, and Apple's iTunes with 1.2 million unique visitors.