14 DAY TRIAL // The digital-music market just got a little more crowded in the US, with the launch of 7digital's store in the country. The European company has seen some success on the old continent and is now taking on the US market. It offers competitive pricing, tracks go for 77 cents, but it also has an interesting approach to getting more market share by partnering with various services or apps like Last.fm, Spotify, Songbird or Winamp.
The UK-based online-music retailer has just opened to the US market offering its entire catalogue for 77 cents per track or $7.77 per album, significantly cheaper than either iTunes or Amazon, 20 percent and ten percent, respectively. It also offers higher quality downloads, as it encodes the files at 320 kbps in the standard and DRM-free MP3 format. Even so, it's almost impossible to go against Apple or even Amazon head-to-head and expect to win, despite offering a cheaper and better product.
But the company does have a few tricks up its sleeve. Instead of competing solely as a music store, the company plans to secure several partnerships like the ones it already has in Europe, either with related services or with promotional campaigns for big brands. This way, it can potentially grab a larger portion of the market without having to spend too much on advertising. "By piggybacking on their reach, we can grab some meaningful market share," 7digital CEO Ben Drury told the LA Times.
The CEO is also confident that, even with the lower prices and competition from subscription-based services, like the increasingly popular Spotify, with which it is actually partnering, the company should be able to generate decent revenue. "The price per unit is definitely plummeting," he added. "People will definitely spend less money on a track-by-track basis.... But the volume of consumption will go up."