TMO Reports - Apple Changes iTunes Count Policy; Includes Pepsi Giveaways [Updated]

by , 7:00 PM EDT, April 28th, 2004

Apple Computer acknowledged Wednesday that it included five million free songs given away in its Pepsi promotion in its total of 70 million songs downloaded from the iTunes Music Store (iTMS) in its first year of operation. Over a month ago, the company told The Mac Observer it was not including the promotional numbers in its download count and would not be doing so in the future.

An Apple spokesperson confirmed the inclusion of the Pepsi promotional numbers in its 70 million song count, announced early Wednesday, but could not explain the executive decision to start including them.

On March 16, Apple told TMO it had not included preliminary download numbers from the Pepsi promotion in its 50 million song total and went on to say, "we will not be including them in future download counts," a spokesperson said.

At that point, Apple reported a weekly download rate of 2.5 million songs. Since that time, Apple has kept to that goal, ending up with 65 million total downloads six weeks and three days later, not including the five million downloads from the Pepsi promotion.

The Pepsi promotion was announced last October with the giveaway of 100 million free song from the iTunes Music Store for customers redeeming bottle caps in speciality marked bottles of Pepsi, Diet Pepsi and Sierra Mist beverage products. The promotion ran from February 1 through March 31.

Industry analyst Joe Wilcox of Jupiter Research believes the addition of the Pepsi download numbers add little to the overall picture for Apple.

"I'm a little surprised that Apple included the Pepsi promotion after saying they would not," he told TMO, Wednesday. "However, given that the promotion only contributed five million to the count and the 2.7 million a week run rate for song sold, I don't see it as being a big problem. If the Pepsi promotion contribution had been bigger, my reaction would be different."

The addition of the Pepsi promotional numbers comes as Apple missed its one year anniversary goal of 100 million downloads by 30%. Despite falling short of its goal and 95% off its Pepsi promotional goal of 100 million downloads, Apple CEO Steve Jobs told reporters in a conference call Wednesday, the company feels they "have a lot of momentum," moving forward and predicted a 2.7 million song run rate per week for more than 140 million songs in the next year.

It is not known if Apple will continue the new policy of including promotional numbers in future downloads counts, such as its current promotion of a free song every day for the next eight days, a free song download every week thereafter, and the recent Ben & Jerry's promotion of 50,000 free iTunes downloads.

UPDATE: In response to our request to Apple if it will continue to including promotional numbers in future downloads counts, a company spokesperson told TMO Wednesday evening it has not yet decided if it will make the policy standard or not.

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