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Apple, Pepsi set to bow iTunes music deal Sunday

MusicMatch announces partnership with Coca-Cola, Sprite

The cola war is going digital.

A long-anticipated partnership with Pepsi that Apple hopes will help raise the profile of its iTunes Music store is launching during the Super Bowl on Sunday. iTunes already dominates the still-fledgling online music industry.

Pepsi will run a commercial featuring 16 teenagers who have been sued by the RIAA for music piracy to promote its giveaway of 100 million free downloads from the iTunes Music store on Pepsi bottle caps.

But in a coup for what has been one of the lower-profile competitors in the digital music space, MusicMatch announced that is has signed a partnership deal with Coca-Cola and its Sprite brand.

The companies did not reveal details of the partnership but said it would go beyond a free music promotion. Coke currently runs its own online music store in the U.K. and is looking to enter the space in the U.S. and elsewhere as a way to reach younger consumers.

A co-branded offering would give Sprite instant entry into the competitive space and give MusicMatch, which hasn’t spent a penny promoting its online music services, a big public boost.

MusicMatch also released the first sales figures for its online music store, which launched in September. Company said it is selling over 1 million downloads per month, a far cry from Apple’s most recently announced rate of 1.5 million sales per week. MusicMatch also has more than 170,000 paying subscribers to its online radio service and said it had its 10th consecutive profitable quarter in the fourth quarter of 2003.

BuyMusic.com, which was the first store to offer online music for Windows users but has failed to gain momentum against larger competitors, also announced a beverage marketing partnership, joining with SoBe to sponsor a concert series later this year and offer free music promotions.

Meanwhile, Napster is making a move to offer discounts to heavy users of its online music store. Company released an update of its software that enables subscribers to its premium service to purchase tracks in bulk packages that can bring the price down from the typical 99¢ to as low as 80¢.

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