From BRAND REPUBLIC: LONDON - Coca-Cola is to team up with Apple for a substantial iTunes promotional initiative as part of the launch strategy for its calorie-free Coke Zero brand.

The soft-drinks firm is negotiating a deal with Apple that will see Coca-Cola-sponsored content appear on iTunes, and its consumers offered iTunes discounts.

The deal follows the closure of download site Mycokemusic last week. The site, which launched in 2004, featured more than 250,000 songs, but music files downloaded from it were not compatible with Apple's iPod.

Music has been one of the key battlegrounds between Coca-Cola and arch-rival Pepsi, and insiders believe the iTunes tie-up could help Coca-Cola maintain its edge in the competitive UK soft-drinks market.

Last summer, Pepsi launched a 'Pepsi Max Downloaded' initiative. An on-pack promotion on 100m Pepsi packs offered consumers the chance to meet stars including Natasha Bedingfield, Ms Dynamite, Westlife, Girls Aloud and McFly.

Pepsi secured a similar deal to Coca-Cola with Apple in the US in 2004, with a deal to distribute 1m songs through Apple's iTunes online music store.

In the US, Coca-Cola already runs its own branded music and entertainment website Stageside.tv.

Companies of this size always have a big debate: should we do it (music, movies, sport) ourselves or piggy-back on a major player? They gave MyCoke a shot and discovered it was too difficult. So now they find it easier (and perhaps even cheaper) to buy space on an industry player. The irony is that iTunes is not totally an industry player, as they have always said that the music is only needed to support their core business, their player. But who else out there has the profile that someone like Coca-Cola needs? In terms of brand awareness, Napster is the only one (sorry Wippit and 7digital, you both have fantastic services but not quite the profile), but not even Napster has the traffic to play in the same league as iTunes.

Paradoxically, I think eMusic or Napster would have given Coke a better environment for their music activities. But either ye has the traffic, or ye hasn't. They hasn't.

I agree with everything you say, Michael, except, Coke didn't do it themselves, they used OD2. I would suggest Coke feel I-tunes make a bigger/better bed-fellow than OD2 did.