Pepsi promotion coincides with launch of Amazon's MP3 store

Billboard.com announced today that Amazon.com (NASDAQ: AMZN) and PepsiCo (NYSE: PEP) are set to reveal a new "promotion in which Pepsi customers can build up points by registering codes on bottle-caps and exchange them for merchandise and downloads from Amazon.com." The announcement from the two companies is rumored to commence with a commercial airing during this year's Super Bowl game, and the promotion will last through the end of this year.

The promotion is also due to coincide with the full launch of Amazon.com's MP3 store, which was unveiled in a demo form in autumn. The two companies will utilize tracks and videos from three of the four major music labels, Warner Music Group (NYSE: WMG), privately held EMI Group, and Sony BMG, a joint venture of Sony Corp. (NYSE: SNE) and Germany-based Bertelsmann Media Group; Vivendi (OTC: VIVEF)'s Universal Music Group will sit out the promotion, though that label will still offer music in the MP3 store. Sony BMG joins the MP3 market with its involvement in the promotion after announcing the sale of MP3 cards earlier this week.

This promotion illustrates the continued demand for high-quality MP3 tracks free from anti-piracy technology, like Digital Rights Management (DRM), which many expect will disappear by mid-year. The full launch of the Amazon.com MP3 store gives consumers another destination for media that is playable across numerous players, acting in direct competition to Apple (NASDAQ: AAPL)'s iTunes Store. Apple spearheaded the move away from DRM last spring, after securing a deal with EMI to drop the technology. The benefit of the promotion is that it will broaden the number of consumers that are aware of high-quality tracks, while increasing the competition that will occur to spur continued development in this area.