Pepsi's iTunes promotion goes flat

The soft-drink company was ready to distribute as many as 100 million free songs through its bottle cap contest, but Pepsi drinkers claimed only 5 million tracks.

Apple Computer said Wednesday that about 5 million free songs have been given away through a Pepsi promotion, far fewer than the 100 million tracks that could have been redeemed.

An Apple representative said the music giveaway was probably the biggest ever of its kind but admitted that the company gave away fewer songs than it had intended.

"We had hoped the redemptions would have been higher," said Katie Cotton, Apple's vice president of worldwide corporate communications. Customers with winning bottle caps have until Friday to redeem their free music tracks.

Cotton noted that the yellow-capped bottles with the Apple song codes were late in reaching some key markets. However, Cotton said the promotion did introduce a lot of people to iTunes.

The 5 million free tracks Pepsi gave away were included as part of Apple's statement earlier Wednesday that it has sold 70 million songs in the first year of its music service. Apple said last fall that it hoped to distribute 100 million tracks in its first year, but when that figure was calculated, it was expected that more winning bottle caps would be redeemed.

Customers who wanted the codes did find a way of boosting their odds, which were supposed to be 1-in-3 for getting a free song. Fans discovered that by tilting the bottle at a certain angle, they could tell whether the bottle was a winner.

Overall, Apple CEO Steve Jobs said Wednesday that he was pleased with the rate at which Apple's music store is growing.

"We feel we have a lot of momentum," Jobs said on a conference call, noting that the company is now selling music at a rate of 2.7 million songs per week, or 140 million songs per year. That's up slightly from the rate Jobs touted in March, when the company had sold 50 million tracks.

Besides the Pepsi deal, there is also a smaller giveaway going on this week in conjunction with Ben & Jerry's. The ice cream maker is offering 50,000 free tracks--one to each customer who pledges this week to vote in the presidential election.

Apple has also launched its own giveaway, offering a free track each day this week and then, in the future, one free track per week. Cotton said that promotion is being done with the participation of the record companies, but she declined to discuss financial details.

Analysts praised that move, saying the promotion should help build awareness and draw in new customers.

"Whenever anyone offers something free, your ears perk up," said Technology Business Research analyst Tim Deal.

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