McMusic for the Masses?

Now that digital downloading is all the rage, rumors are flying, and it's time for "deal watch." McDonald's (NYSE: MCD  ) is rumored to be pairing up with Sony (NYSE: SNE  ) in a promotional campaign involving the Sony Connect music service, with a planned launch for the spring.

According to the Los Angeles Times, McDonald's will serve up about $30 million in advertising, receiving discounts on songs licensed from Sony Connect. The music will be given away for free with items from its menu. (The mind races. Happy Musical Meals? A song with your salad?)

We've mused about the prospects for Apple (Nasdaq: AAPL  ) -- with its iPod as well as its iTunes site for digital downloading -- and its marketing blitz with Pepsi (NYSE: PEP  ) . We've also seen Roxio's (Nasdaq: ROXI  ) Napster hit the scene again, hoping to make up for lost time after it switched to more law-abiding gears. We've also seen increasing disinterest in traditional music delivery, epitomized by poor Tower Records (which has since emerged from bankruptcy but still needs to regain edge, nonetheless).

Even more recently, Starbucks (Nasdaq: SBUX  ) launched its first music café with Hewlett-Packard (NYSE: HPQ  ) , one more step towards a new guard where music isn't just art, commentary, rebellion, or entertainment, it's an effective marketing tool for the masses. Companies are betting that digital music is a quick-and-hip loyalty builder for a consumer audience, especially when targeting youth.

Apple's had a pretty big slice of the legal download market, with a 70% share. Sony's a little late to the game. It's a little surprising, considering Sony brought lightweight music on the go with the Walkman, back when cassette tapes were a hip alternative to those old-school 8-track tapes and vinyl.

According to the news coverage, Apple was courting McDonald's, only to be beaten to the punch by Sony. That hurts -- McDonald's would have been a sweet deal for Apple, in terms of exposure for a musical service. McDonald's pack weight with some 30,000 locations, roughly 47 million customers served daily, the repeat business of its customer traffic, and its appeal to young people.

Despite the fast-food chain's marketing muscle, the partnership is still a rumor, and Sony Connect hasn't even made its grand entrance as of yet. Expect the unexpected as more companies sign on to this new trend of using music for marketing. And keep an eye on all the players as they try to take a bite out of Apple.

Is Apple going to lose its advantage in the digital music space? Talk it over on the Apple discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.


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