Get Real
Earlier this week, RealNetworks announced that it was slashing prices in its online music store. Most songs were marked down to 49 cents, while the majority of albums go for $4.99. Good news for the consumer, right? Wrong. It's just another example that Real is a company with nothing but contempt for its customers.
First of all, let's look at what this move is really about. Real wants to force its way onto the Apple iPod. To do so, Real has rewritten its Harmony software to make it fool an iPod into playing the previously non-compatible format. Apple accuses Real of having the ethics of a hacker and so the battle is joined. I'll leave the debate on this component of Real's business practices to other, more learned minds, and focus instead on what this means to the consumer.
Real calls this promotion, with a straight face we assume, the "Freedom of Choice" campaign. That euphemism would be worthy of a hearty guffaw if we all had not been victims of Real's version of freedom over the past nine years. I have never encountered a piece of software that tried to take choice out of my hands more often than the Real Player. Not only does it try to hijack the file of every other media player on computer, but its primary purpose seems to be selling more Real products rather than playing a media file. This has led me to choose Real as the player of last resort.
Real also calls this a music sale. Note to Rob Glaser: it's not a sale when the product costs more than you can sell it for. It's no secret that Apple, Real and the other online music vendors pay the record companies about 90 cents per song. Apple, despite its more than 100 million songs sold on the iTunes Music Store, realizes that the money is to be made on the player, the iPod, not the music. To lower prices to an unsustainable level simply in an attempt to force your way into a new market is a tried and true method to ultimately give consumers less choice.
What Real is doing is no different than a big airline trying to run a small one out of business by under-cutting it on common routes. After the little guy is gone, guess what? The fares jump back up, higher than ever. That works for airlines, but it won't work here. Why? Beacuse Apple is the big guy. Not just because of the number of iPods or songs it has sold. But because it has created a pleasant user experience at an affordable price.
This ploy will fail for Real, ironically, because consumers want freedom of choice. They want to choose a product that works for them at a price that is right. But they also want to buy from a company that respects them as consumers. In this fight, that choice is clear.
1 Comments:
A friend of mine also points out that they're spyware purveyors and innovators. Thanks, guys.
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