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EMusic spreads free MP3s through HP deal

The online music company and PC maker expand their efforts to package music content with computer hardware, offering free MP3 downloads with HP Pavilion home computers.

    EMusic and Hewlett-Packard on Monday expanded their efforts to package music content with computer hardware, offering free MP3 downloads with HP Pavilion home computers.

    HP Pavilion buyers will get a free trial to EMusic Unlimited, a subscription service that offers access to a catalog of 150,000 MP3s, the companies said Monday. The deal is the second between the two companies. Last June, EMusic agreed to offer bonus MP3 music downloads to buyers of HP's CD rewritable drives (CD-RW).

    Like most dot-com companies, EMusic faces challenges in the marketplace for customer attention and funding. Monday's announcement comes a month after EMusic laid off more than a third of its staff.

    Analysts say that EMusic's pacts with HP probably have been "the most successful things" the company has done with its music catalog.

    "Because of Napster and other factors, consumer activity with the catalog has been minimal," said Phil Leigh, an analyst at Raymond James & Associates. "But (EMusic's) ability to sell to somebody like Hewlett-Packard has been much more rewarding. The total dollars from Hewlett-Packard probably rivals the total dollars from all other customers combined for EMusic outside of the (RollingStone.com) property."

    Under the CD-RW agreement, which covered three calendar quarters, HP said it will purchase a minimum of approximately $3 million of downloadable music and services from EMusic to be bundled with HP CD-Writer products.

    EMusic's service costs $9.95 per month for a 12-month subscription or $14.99 per month for a 3-month subscription.

    In addition to its catalog of downloadable MP3s, the company operates music-oriented Web site RollingStone.com, which has faced financial difficulties as a result of a decline in Net advertising, according to executives.