With DRM fading away from MP3s, here come the ads

Today, Amazon.com announced an advertising partnership with Pepsi that coincides with the direction of the music industry as predicted by its leaders.

Numerous music industry heads at a panel discussion at CES last week displayed favor for the ad-supported, subscription-based models of music sales as we move away from DRM. Today, a major online music store that rejected DRM since it opened -- and was not represented on the panel -- is showing similar interest.

Amazon.com, which claims to offer over 3.25 million DRM-free MP3s for sale, announced today a promotional alliance with soft drink company Pepsi Inc. that is scheduled to begin on Super Bowl Sunday. Pepsi products will be marked with "points" that customers can collect and redeem for MP3s on Amazon.com.

There is no word yet on how much one will have to spend to get a single music file, but Pepsi says that over 4 billion bottles will be circulated in the promotion.

Terry McBride, CEO of Nettwerk Music Group, in the panel discussion last week at CES asked why something like this did not already exist: "Why can't Amazon have a download store where songs are 25 cents with ads?" Just like cable, he continued to say, where users pay for the service, but it is subsidized by advertisers who can bring the overall price down?