Sub Services Testing New Pricing Models

Listen.com's decision to sell digital singles for 49 cents via its Rhapsody offering (Bulletin, Feb. 13) sets the scene for subscription services to experiment with new pricing models in the coming year. "I think we're all going to experiment this year," says Sean Ryan, CEO of Listen, which is making the offer as part of a promotion with Terra Lycos. "We want to see how burning drives subscriptions."

Listen views the 49 cent offer as a "great incentive" for consumers to try Rhapsody. For its part, the company hopes to determine whether the offer will lead to an increase in burning volume and whether it will motivate potential subscribers. Says Ryan, "It may turn out you can have a higher subscription price if you're offering cheaper burns."

But Listen executives caution that the company is not trying to push the envelope on pricing levels. "It's definitely not a new price standard," Ryan says. "This is a significant promotion by us."

The offer is one of a host of efforts by Listen to lure new customers. Other initiatives in effect or in the planning stages include bundling premium radio with high-speed Internet service, providing a limited number of free burns, and offering family accounts that enable the use of Rhapsody on multiple PCs. The company is also considering tiered pricing later in the year.

Listen is not alone in tinkering with special offers.

Pressplay recently launched a "refer a friend" promotion, in which members who get other people to subscribe receive 10 free burns.

Other subscription companies are expected to begin pursuing similar tests shortly.