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Jan 15, 2008 10:48 am US/Eastern
Timberlake Appearing In Super Bowl Ad
SEATTLE (CBS) ―
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The boy band heartthrob turned Grammy-winning R&B singer will appear in a spot for Pepsi, kicking off a yearlong $1 billion giveaway of MP3s, CDs, videos, consumer electronics and other items on Amazon.
Photo by Frazer Harrison/Getty Images
Come Super Bowl Sunday, Amazon.com will get a leg up in the digital
music race it's running against Apple Inc.'s iTunes Store. And not just
any leg: Justin Timberlake's leg.
The boy band heartthrob turned Grammy-winning R&B singer will
appear in a spot for Pepsi, kicking off a yearlong $1 billion giveaway
of MP3s, CDs, videos, consumer electronics and other items on Amazon.
Back in 2004, PepsiCo Inc. and Apple forged a similar partnership,
which started with an iTunes Super Bowl commercial promoting legal
music downloads, to the tune of Green Day's version of "I Fought the
Law." The companies gave away 100 million free iTunes downloads that,
with rising iPod sales, helped push Apple to the forefront of the
digital music industry.
Working with Amazon this year is big deal for Pepsi, which said it
will spend more on its "Pepsi Stuff" advertising campaign than on any
past marketing effort.
For Amazon.com Inc., the arrangement could mean even more.
In September 2007, Amazon launched a digital music store and
committed to sell only MP3-format tunes, which can be copied to
multiple computers, burned onto an unlimited number of CDs and played
on most portable devices, including Apple's iPod and Microsoft Corp.'s
Zune.
Thousands of independent music labels signed deals with Amazon, but
EMI Music Group PLC, which already offered songs without digital rights
management coding on iTunes, was the only major label to agree to
DRM-free sales on Amazon.
But as a rise in sales of digital tracks in 2007 failed to offset
the overall decline in album sales, the three big labels have rapidly
begun retooling their digital strategies. When Vivendi SA's Universal
Music Group, Warner Music Group and Sony BMG signed on to sell DRM-free
songs, they chose to do so on Amazon and not iTunes, where more than 70
percent of digital music is sold.
"The record labels are quite annoyed with Apple for the situation —
CD sales are declining, and digital sales are not making up for it,"
said Philip Leigh, a senior analyst with the research group Inside
Digital Media.
Leigh said the record companies want more flexibility in the way
digital music prices are set. Amazon allows some flexibility, but
Apple's 99-cents-a-song pricing still dominates the market. By working
with Amazon, the labels are fostering competition and potentially
gaining more control over how much a song is worth.
While the companies would not disclose financial terms of the deal,
teaming up with Pepsi has the potential to transform Amazon from a
niche seller to a major player. Leigh said music consumers who may not
think about copy protection today will quickly embrace DRM-free music
as they buy new computers and devices and face the hassle of moving
libraries full of DRM-protected songs.
"The mass market consumer doesn't want these complications," he said.
Danny Socolof, president of Mega Inc., the Las Vegas marketing firm
behind "Pepsi Stuff," said Amazon's decision to sell MP3s meshed nicely
with one of Pepsi's brand values: choice.
"As we looked at the landscape of the music business, we realized,
many other people realized that trying to lock up music with various
different digital rights management schemes was failing miserably," he
said, confusing consumers or driving them to music piracy.
The major music labels that will participate — EMI, Warner and Sony
BMG, but not Universal — responded to the deal because Pepsi and Amazon
could bring millions of new digital music shoppers online, he said.
Socolof, who helped Pepsi forge the music partnership with Apple
several years ago, would not say whether he explored a new Apple deal
this year.
"I think it's pretty obvious to everyone that it's important that
this marketplace grow and that there be many players in it," Socolof
said in an interview.
Timberlake just wrapped his FutureSex/LoveShow World Tour this fall.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
