Telefonica offers free music

Company hopes to drive subscriptions

MADRID — Copying the strategy that has powered dramatic Internet TV growth in France, Spain’s Telefonica is offering more than two million songs entirely free to new and existing ADSL subscribers.

For the moment at least, the free-of-charge offer is a marketing ploy, and limited to music, designed to run from May 26 to May 2009, aimed at driving Telefonica’s Spanish ADSL subscriber base.

Songs are offered on Pixbox, Telefonica’s online store launched in 2006. Pixbox has seen 1.4 million downloads since the beginning of June, said Jose Gonzalez, director of multimedia development.

Pixbox has added 10,000 new subs since late May, he added.

Telefonica dominates Spain’s broadband market with a 57% share, but ADSL penetration is still relatively low in Spain, running at 18.3%.

It may not be completely coincidental that Telefonica’s music move comes just as Filmax is launching portal yodecido.com, offering songs and movies for a price, as well as online TV channels.

“We see Filmax as a facilitator more than a competitor, taking into account the level of downloads at other P2P systems. This competition helps the user moves from one segment to another,” Gonzalez added.

Telefonica’s free-of-charge download system doesn’t include movies nor TV series, but Pixbox aims to strengthen its film catalog, increasing the number of titles from 750 to 3,000 in the short term.

Pixbox has deals with Universal and Paramount, and Spanish distributors Tripictures, Aurum, Filmax, Manga and Notro. It’s also inked with Spanish producers rights protection society Egeda.

Portal offers movies on a pay-per-transaction basis using both download-to-own and download-to-rent systems, but customer reaction appears to have been slow.

Telefonica is negotiating with other studios and TV series rights holders to broaden its movie and TV package.

In France, where operators offer IPTV free to ADSL subscribers, the Internet TV market has grown to 8.4 million viewers, a Mediametrie report announced Tuesday.

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