Slashdot Mirror
Napster Business Model Not Generating Revenue
An anonymous reader writes "We all know that Apple generates revenue from iTMS via hardware sales. How the hell can pureplay music stores like Napster generate revenue enough to even stay alive? They don't. Is this the first indication of the bubble bursting? Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?"
it means they need napster alive to be playable?
SHE does throw dice.
>
Just to kill two birds with one stone, I'll probably load them on Zip Disks. That'll consolidate all my unused, overpriced media into one small place.
"Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?"
Yes, it is. Here's what you do: buy an iPod, use iTunes, and try to keep remembering that you should have just done that in the first place.
I remember the days, not so long ago, when *any* serious business was loss making. That's not cool any more?
Any attempt to sell digital music while keeping the current cost model (where a huge part of the proceeds go to feeding record company structures) is going to be a loser.
Apple don't mind because they drive hardware sales with it, and the lossy business model will drive off competitors.
The questions for me are: how long can the music industry survive when it can't even make the Internet a cost-effective channel for distribution? And what will happen than?
Ceci n'est pas une signature
Don't you think it's a bit early predicting the demise of Napster? They lost money, sure, but they just launched. It costs a lot of money to launch a business. You claim that their model doesn't generate revenue (and I think you may mean profits, not revenue) but I don't see where in the article that claim is validated. Add to that the fact that the article mentions they are restructuring to cover the costs and this post is a non-story.
Support the First Amendment. Read at -1
It could be that they're absorbing a financial hit now so that 3 years from now, when brick-and-mortar stores vanish, they have brand awareness and at least some following among consumers. Besides having to compete w/ iTMS, Napster's problem is that they need something to distinguish themselves from the rest of the pack. As Napster II has discovered, brand awareness isn't always enough: it sure as hell didn't work for them his time around!
Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?
easy! you just sync up your flash-based mp3/wma player one last time and make sure you keep a lifetime supply of batteries handy...duh!
I'll turn into a supernova and burn up everything. Well I'll turn into a black little hole and you'll turn into string.
Honestly are you surprised Napster is failing? Napster was one of the first victims of the RIAA's war against music swapping online. The average person's recollection of Napster is "Oh that music software that got shutdown." It's hard to shake that image, especially with Joe Smoe.
Besides look at Apple... They're Itunes service has caught on with the Non-Computer-Nerd as well because Apple has been able to market it as the Cool / Easy to use music service.
Hell even my mom could use I-tunes.
Here's what I don't understand: Presumably, at a large cut of $1/song the record companies are spinning a nice profit. Otherwise, why would they be joining iTunes/Napster/everyone else?
/james
Now, if the vendors can't break even, why doesn't a record company (or, say, the RIAA itself) buy an 'unprofitable' online vendor and continue merrily selling songs - sure, the service itself costs money to run, but 100% of the money goes to the label. Is doing this stuff so expensive that it actually costs them more than $1 to let you download a song?
I remember that Napster belonged to Bertelsmann/BMG before, but apparently not now. Hmm.
I don't know whether Napster's DRM'ed WMA need it to work - I'd guess they just need Windows Media to stick around. But that's the whole problem with DRM - sure, it's around now, but what about 20 years down the line? 50? 100? The RIAA and it's ilk want DRM to become the norm for all media - I don't know why the archaeologists aren?t complaining more.
It doesn't say why the are running at a loss.
Is it all the money they invested in creating the new software, paying up-front fees to labels, launch advertising, etc?
Its quite possible that they have only lost money due to once time investments, while they are making a profit on the actual selling of music. In which case, given a year they'll start turning a decent profit.
Are we all so media-crazed that we always have to buy the latest single songs online? Do we fear that we're no longer cool, so we spend $400 on a jazzed-up Walkman? When the last brick-and-mortar store closes, when the last music-afficionado gets thrown out of work, when the 'hip' bands have been cloned to the point of utter whitewash, when the droids at BestBuy and cdnow.com have completed the assimilation, who will you turn to?
Go buy a used CD, tape off the radio, or take your $400 and see 40 local band shows instead. Free your mind.
Napster is a DRM shell demonstrating that DRM is unprofitable even with the best brand recognition in the industry.
There is Lots of money for music and artists but no money for greedy middlemen not supporting recording artists.
Recording companies? Those are collections of sound engineers who help with a recording. They produce quality recordings that show the artist in the best light.
Publishing Monopolies? Those businesses buy what might be popular for as little as possible then sell it for whatever they can get.
Assuming that alot of American internet users sport a broadband connection.. we might see a napster-like service which sports Dolby-Digital audio within the next couple of years.
Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?
...and how????
Well, People never supported WMA... hence the death of Napster...
I wonder why they used WMA when MP3 is the world wide standard.. Maybe someone forced them to do so... But who???
R.I.P. Napster (for the 2nd time...)
Most of the songs I look for on Napster, they just don't sell (not in their catalog). So it's off to Amazon or the CD store or a used music place.
Don't blame Durga. I voted for Centauri.
And even if it does fail, that need not be indicative of the viability (or lack thereof) of the whole market. It might just be that they have a bad business model.
Apple's iTunes and iPod provide synergy with each other but iTunes limits itself to only those with iPods (or effectively does, since converting from AAC to MP3 to use with other players is a pain). Nice for them in the niche market, but a limiter in the absolute sense.
I think Napster2's problem, and what will limit iTunes even within the iPod market, is simply how much the stuff costs relative to physical media. I know that many people, myself included, aren't really willing to pay $10+ for only the bits when the (higher quality) physical media is similarly priced. That's just a bad deal, and that's why of the 700+ albums I have in MP3 format every single one of them came from a CD. If you want to give me less, you have to charge less; think $.50 a track, $5 an album. I'd do that.
I don't really think the WMA format is limiting them, seeing as the only player currently on the market that doesn't support that is the iPod (excepting, of course, the first generation MP3 players; they all did by the 2nd generation, quite a coup for Microsoft if you ask me). Though, honestly, I'd prefer not to use either AAC or WMA -- unless, again, they give me even more of a price break for providing the stuff in a locked format. At $.25 a track, $2.50 an album, I'd do that. At those prices I can afford to buy again to migrate.
But I don't see those prices coming down until the record industry screws up CD media to the point where most people won't buy it. Moreover, the record industry may kill their own online sales by offering CDs with both raw tracks and WMA encoded tracks, something they appear to be doing.
jim frost
jimf@frostbytes.com
You simply burn it to CD (which it will do) then its a WAV and its like anyother ripped music. So its not a problem.
. I love the sound of burning women and screaming rubber....
Napster fanatics? Are you posting in the right forum?
And not the Office Software market, either.
Microsoft only dominates where it has a monopoly. It's easy to dominate when you have a monopoly, because having a monopoly means that you dominate!
In Soviet Russia, the music pays you! (Or pretty close, from 1c/track).
At the beginning Microsoft did not generate revenue. No pure software company did. It was IBM, a hardware vendor, who helped Microsoft to come up. So they did for Oracle (at eraly days of v5). So, yes, hardware vendors are now getting online music to work. But that only until people stop afraiding to download music. After that: a big part of RIAA revenue will go online (with RIAA participation or without). Then Online music will be self-efficient enough to live without hardware vendors.
Less is more !
iTunes (small 'i', big 'T', no hyphen) is an application, one that runs on Windows and Mac OS X.
The iTunes Music Store (iTMS) is the web service. (Plenty of us use the former without the latter -- here in Europe, iTMS isn't even available...)
And, while I'm here, a related point that also causes confusion: the iTMS sells AAC files that have been wrapped in a FairPlay encryption wrapper. Plain AAC files are not encrypted or restricted in any way.
Right, now I've got that off my chest... Did anyone seriously think that people would be fooled by the Napster name? That they wouldn't realise it was a completely different service from a completely different company? I hate to rehash old jokes, but it does look rather like:
Ceterum censeo subscriptionem esse delendam.
I worked for Roxio till 2002. It was pretty obvious that the business model was the classical:
...
Step 1: Buy the Napster name
Step 2:
Step 3: Make Profit!
End '02, the long-time CFO of Roxio left "for personal reasons". Couldn't it have been that he was tired of Chris Gorog's pipe dreaming? I leave that up to the readers...
Your ex-Shnapster AC
Are we all so media-crazed that we always have to buy the latest single songs online? Do we fear that we're no longer cool, so we spend $400 on a jazzed-up Walkman? When the last brick-and-mortar store closes, when the last music-afficionado gets thrown out of work, when the 'hip' bands have been cloned to the point of utter whitewash, when the droids at BestBuy and cdnow.com have completed the assimilation
When the large record producers no longer have a lock on distribution, when even independent artists can make a living if their music is good enough...?
Please stop writing crap in slashdot. Thank you.
Seriously, I don't think the problem is the AAC, it's the DRM. And that is common between iTunes and the WMA stores.
*BSD is dying... oh wait!
Right, I guess you use allofmp3.com too and remember what happened to download speeds last time Slashdot mentioned them.
But on the other hand, how many records do you play that you bought 20 years ago? 50? 100?
I think we're forgetting how recent most of our music is and how many LPs and CDs we have broken. Let's try to keep thing in perspective and not expect our files to survive 100 years.
Apple makes 35 cents for each song they sell. Of course they have bandwidth costs to cover, and the whole developing costs, but given their stellar sales it's hardly fair to say that Apple only generates iTMS revenue through pushing hardware.
I hadn't known there were so many idiots in the world until I started using the Internet -Stanislaw Lem
OK, NO NEED TO SCREAM!
(Damn,looks like mp3 players turn people deaf, as the walkman)
BTW, if you only stick with an horrible OS, Napster, WMA and an ugly mp3 player, just cause you can't listen to the all song, you got a problem!
A company sacrificing benefits in order to "built up brand-awarness" hoping to become a distribution giant when "brick-and-mortar" dinosaurs finally vanish, all this in a market when a dozen other companies are betting on conquering exactly the same futur market?
Now why do I have this feeling of deja vue?
What do you know about World Politic? Find out in this quiz
Because then people could listen to a single song streamed over the net and copy it to disk using a utility like Wiretap. If you could easily obtain a complete album in the time it takes to listen to it that would completely kill their business. Now, maybe 30 seconds isn't quite long enough, but it's not too bad and seems a reasonable compromise.
Actually, it sounds like he's describing a bandwidth issue between him and Napster. Now, I'm going to take a hammer and chisel to your caps lock key. It's sometimes a necessary procedure when we get refugees from AOL.
It wasn't a boon to begin with. You have to bubble something up for it to burst. Not every moron and their brother who puts a face on "old technology" is an industry leader and going to revolutionize the world.
/. editors idolize the stupidest people really irks me. Let's get the facts straight. Napster was a cool idea when it was new. It was horribly written buggy software but the concept was cool. However, while mr. Napster was off doing whatever it is he does 300 others have written their own edonkey's and kazaas and winmx which are like a billion times better.
I'm sorry, but the way you
Anyways, getting back to the point. Not all business models are sustainable and are rarely thought out for the long term. Hence the
1. Stupid action
2. ???
3. Profit
jokes. So how about we idolize the players who are not in it to make the quick buck but to actually help progress society and technology?
Tom
Someday, I'll have a real sig.
And what if the licence includes details on your HD as well?
The great problem (read: opportunity) with music is that supply doesn't meet demand: I'm sick of my music collection, i want to find new stuff, but it's really hard because you can't search for what you don't know exists.
If i were the RIAA or one of its licensed resellers (e.g., Apple, Napster, Tower Records), i would provide people with their own personalized Internet radio station:
You launch the application, and they start streaming you some music. If you like it, you give it a thumbs-up. If you don't, you give it a thumbs-down (and probably skip to the next song). Pretty soon they've built up a profile for you and can search their database for other people with your tastes. You're discovering all sorts of new music that you never would have heard of.
But it's just a stream -- you can't save the songs and listen to them anytime you want. Unless you click "Buy this song", in which case the MP3 is saved to your hard drive. Perhaps you could even recommend songs to friends.
Maybe the radio station could be subscription-based, but i'd run it as a loss-leader.
There. That'll increase music sales tenfold. As a nice side-effect, little upstart bands could make it big (or simply make enough to support themselves) without having to get "discovered" by an "insider".
--
Mod up a post Rob doesn't like and you'll never mod again
I listen to plenty of records that were recorded 20 years ago, even 50, and one or two that are pushing 100 (well, 80 - mostly early jazz). Much of the early jazz are transfers from the commerically produced end product. That's the point.
Oh, so it means that the protection isn't working actually.
How can you do that? Prey tell, my lord.
"I don't know why the archaeologists aren't complaining more."
... is it because most of the current crop of big "artists" aren't really going to be considered classics by any stretch of the word in a few years once they've faded into obscurity?
:)
Let's see
For instance take away Britneys/JLos/Justins looks and you ain't left with a whole lot else.
Iron Maiden.
While everyone hoots and honks about the DRM on Napster/Microsoft/Evil Company X, isn't it also true that those nice-guys-in-turtlenecks at iApple have also put iDRM on iTunes? I mean, they have some sort of computer-locking mechanism, don't they, that means you can't just make copies of music you buy on-line but rather have to use it on a restricted number of machines?
In a way, Apple might really hurt on-line music - they are funding themselves with iPod sales whilst breaking approximately even on music, so they don't really give a damn whether their pure music business model is competitive or realistic - it's a loss leader. Kinda makes it hard for others to break into the market, and makes it hard for anyone to buck the RIAA's royalty harness if Apple's gonna sit there and pump millions of dollars in royalties directly into the studio's veins. I feel a little more skepticism is in order, and a little less of people writing iT|\/|s or whatever the hell that stupid thing is.
I believe the difference in business model is this:
Napster
-------
1. Set up music system with unrealistic price structure due to being the RIAA's gimp
2. ???
3. Loss!
Apple
-----
1. Set up music system with unrealistic price structure due to being the RIAA's gimp but wear black turtleneck and pretend to be 'the good guy'
2. ???
3. Profit!
Read Pynchon.
"But on the other hand, how many records do you play that you bought 20 years ago? 50? 100? "
Most of them.
You all need to keep one simple fact of business in mind.
Very few new businesses (and this is a new business, because about all that was kept from the original Napster was the name) make a profit in their first two to three *years*. A great many of them take 5 years to show a profit.
So why is everyone acting so surprised that Napster isn't making a profit after mere months? Oh yeah...that's right...this is Slashdot...we don't let little things like "reality" get in the way of a hyping up a story where none really exisits...
I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
But in this case we're talking about the lifespan of the medium. I also have a large number of old recordings, and I have had to buy a number of them more than once because my copies of the medium (LPs and CD) did not last. So DRMed files are not necessarily any worse than what the records we already buy.
Files without DRM are obviously better, but is this really a much worse offering than what we already get?
I am the guy who wrote the post above. I wish to apologize for it. It's not a good post.
(1) The medium is often all that's left, such as in the case of much of my early jazz. Back in the days when copyright was time-limited, often the masters would be lost. And with "ephemera", or material that just wasn't consistently popular, there isn't a financial incentive to ensure that this doesn't happen. That's why the like of the Prelinger archives are so important.
(2) I would like to buy my media once, and then use it forever (well, until my death). I have a large collection of LPs that I never listen to any more, and have re-bought many on CD. I don't want to repeat that. Avoiding it is possible now, particularly with digital media. The oldest files on my current laptop date from the mid-eighties - they started out on 5.25", moved to 3.5", a double-height 10mb Winchester, over many null modem cables, later CDRs, ethernet and WiFi, but they are still the same files! My music can now do the same - it's currently residing on a 670gb Shuttle box in my living room, but I'm sure that will not be it's final resting place.
DRM prevents all of this.
---
Date: Wed, 21 May 2003 09:29:24 -0700 (PDT)
Subject: Napster - any value in the brand?
I've been trying to figure out the breakdown on costs for iTunes, here's what I've got so far:
.99
.29 .70 publishing rights & other payments to labels
.24 .05 Credit card transaction base fee
.21 .03 Credit card % of value fee
.16 .05 Fraud / charge back cost
.14 .02 Media delivery (bandwidth cost)
.09 .05 Hardware / infrastructure costs
.04 .05 Salaries & overhead
Balance Cost
Even at 2,000,000 song sales, that's not a lot of remaining gross margin, like $80,000 over two weeks and I suspect it's declining as well.
The other way to look at this is that it's a loss-leader for iPods and other Apple hardware :-)
---
Over the summer Steve Jobs confirmed that iTunes is not currently and may never be a profitable service.
Napster is trying the university thing because it provides them with a fixed, recurring revenue stream. I wish them luck.
Up yer Irons. What would Eddie think?
from what i hear that isn't all your dog enjoys doing!
The easiest way not to lose your music is stick to non-DRM music.
Let's look at a few facts.
1. There are bootleg MP3s of any popular song you want on the Internet.
2. Record companies will not give you MP3s.
Therefore, people download bootleg MP3s. Why can't the record companies just supply MP3s? Songs are going to be bootlegged no matter what they do, so why not let me buy the songs in MP3 format? I would do it. Just look at all the people downloading DRM music, there would be even more people downloading DRMless music.
People will do the right thing if it's not too much of a hassle. Record companies think every single song is pure gold but they're just not.
No. Because I don't have any. But if you do then I'd suggest tucking them away next to your Ab-Master 2000.
My life is one big siesta in which I'm dreaming I wished my life was one big siesta.
...that's 10% marginal profit on a product where the company that's selling it is
a) Making money off it elsewhere and
b) Is positioning themselves to become "the" online music shop much like amazon.com was doing to become "the" online shop (buzzword: e-tailer) during the boom.
So what if the iTMS has a P/E ratio of 0 today? I think amazon.com had something like -1000 or worse on their lowest. And that was completely without making money on something else, though of course the times were different.
There's nothing wrong with Napster IIs business plan if they assume profits will rise. However, it the case of a boom like that it's usually about who's got the deepest pockets, who will still remain standing as the others are forced out of business.
What gives iTMS the power over the other shops is the ability to stay that low. They can simply keep the market hostile until the other investor money is gone, building brand and promoting iPods until hell freezes over if forced to. Once that is gone, they can start making money of iTMS too, you just wait and see...
Kjella
Live today, because you never know what tomorrow brings
Will apple just stop making iPods & Close iTunes when costs catch up to Profits? if so this does not bode well for those of us who want to see the legit music D/L continue. The RIAA will say 'see we told ya - Pirates even killed the legit download sources'.
Maybe Apple is trying to become a distributor, and take some power away from the big labels. I.E., Apple markets, promotes, distributes via iTunes, eliminating the need for Sony, BMI, etc.
Steve Jobs at the Grammy's LOL
Sure, go on and compare the business plan of Roxio's Napster to the failed dot-com business plans of the late 1990s. I can still see one major difference between the environment that produced Pets.com and the current environment surrounding digital music downloads: the downloads are much cheaper than anything the B&M stores could ever offer. The public has started to demand alternatives to paying $15 for three good songs and nine worthless ones, and the alternative is $3 for just the three good songs.
the iTMS sells AAC files that have been wrapped in a FairPlay encryption wrapper. Plain AAC files are not encrypted or restricted in any way.
Plain AAC files have two copyrights and several patents on them. The two copyrights are the copyright in the musical work owned by a sheet music publisher and the copyright in the sound recording owned by a record label; they come into play whenever anybody redistributes a recording in AAC format phonorecords.
If you mean only technological restrictions, AAC has those as well. Without a decoder, you cannot play back AAC files, and it's a federal tort in the United States to distribute AAC encoders or decoders without paying the holders of patents that cover the methods that make up AAC.
or take your $400 and see 40 local band shows instead
Many typical customers of iTunes Music Store or Roxio Napster would have to sit and wait for nine years in order to get tickets to a local band show. Twelve-year-old children control many of their parents' music purchase decisions, and venues friendly to local bands typically require all persons who enter the premises to be twenty-one years of age or older.
It's probably a sign of age, but I can't listen to most of the new music that's coming out now. For some reason, my perception of culture changing halted sometime around 1995. Most of the music I listen to came out of the 70's or 80's. I've enjoyed a few newer songs, but I can't tell most of these new bands apart.
-
Tech News, Reviews and Tutorials
I have a guitar and I know how to use it.
How much money do you pay to the sheet music publishers for the rights to use your guitar publicly? Are you aware that if you write your own songs, you are likely to accidentally copy a popular song? Subconscious copying is actionable infringement.
They should run it from India.......[SWAAAACK!]
Table-ized A.I.
many people, myself included, aren't really willing to pay $10+ for only the bits when the (higher quality) physical media is similarly priced.
Haven't you heard? A listenable album costs about 4 USD on the dollar-a-song services because you can skip paying for the filler.
third quarter revenue fell to $18.8m from $25.4m.
$18.8 million is a lot of revenue. They aren't making a profit, however...
Roxio said in December that it expects to significantly reduce Napster-related spending as its moves away from the launch quarter.
Sounds reasonable.
People will pay for data. They will pay for bits. They will pay for downloads of music. This is a fact. It is no longer an argument. iTunes is irrefutable proof that the business model works. Every Linux company is further proof. Game over. Close the book. End of story. Lower the curtain. Goodnight. Drive safely.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Because then people could listen to a single song streamed over the net and copy it to disk using a utility like Wiretap.
Some operating systems provide ways to disable audio capture shims such as Total Recorder and Wiretap. In those systems, the operating system publisher signs audio drivers with permission to play digitally restricted media; in order to get a signature, a driver has to shut off all cleartext digital outputs during playback of such media.
Search for "Secure Audio Path" for more information.
Apple makes money on sales of iPODs.
However each music entity also makes money from the sales (otherwise they wouldn't agree to deal).
BMG could do well to convert it's CD sales store to online media sales. Other record lables could do the same.
Microsoft could use a music store to push a new media format.
eBay or mymp3.com could charge a "commission" fee for selling online music from indupendent artists.
Google or Yahoo could use MP3 sales as additional content.
Keenspot might grab into the act with "Inspired by" music sales...
"Gothic Erotic by Britty Speres inspired by Zebra Girl"
(Don't say it... You dona wana get the demonic girl mad at you...)
Or maybe something more intresting inspired by "User Friendly" or "Sluggy Freelance"...
In the past you'd need a whole colection of soungs to get "Inspired by" music sold but with single unit sales a single soung could do just fine. With a bunch of KeenSpot comics there could be a CD but not with Sluggy or UF as they are independent.
I don't actually exist.
Nowhere in the linked article does it say that they can't, or are not, making money.
It just states that the company that owns Napster lost an assload of money because of the expenses that they went through to re-launch Napster 2.0.
Duh. Hello? It costs money to make things.
"Champagne for my real friends - and real pain for my sham friends!" http://ericblade.postalboard.com/
The problem is that everyone and their cat is getting into the Online Music Store business. Lots of people are concerned because there is no simple combination of song availability, software and DRM scheme between them all. That is no way to try and draw customers to your store, especially those who will still get their music from P2P networks.
Unfortunately, if you choose one such outlet and they go bust, you are essentially pooched and may have worthless files because they are forever locked.
In Napster's case specifically, the popularity of the brand took a nose-dive after the original service was shut down. By the time 2.0 made its debut, the brand's good reputation was nothing more than a faint memory.
Don't forget that the original Walkman cost more than $400 in 1979 Dollars.
A bit of Walkman history
It was also derided as an unecessary gadget, but you know how history turned out.
Joe
A bit impatient aren't we? I mean, they've barely turned on the office lights in the launch of their new biz model. It would be downright suspicious and worthy of an SEC investigation if the HAD announced a profit.
I haven't formed an opinion on their odds of success, but I can say unequivocally it's too soon to tell.
For most of the informed readers, it not a matter of overlooking Apple's DRM, but a matter of recognizing its fairness and utility to users: iTunes Music Store's "FairPlay" is pretty consumer-friendly.
While I don't know all the details of Napster's DRM (I use iTMS), I do know that WindowsMediaPlayer is *not* as consumer friendly as iTunes - a prime example being that WMediaPlayer will burn a disc in WMA format by default rather than something most CD players or computers could handle (e.g. an audio cd or mp3)
Isn't predatory pricing (charging a price below what it costs you to produce a product) illegal as a result of some anti-trust legislation.
"There's this other company in Redmond that is eyeing its competitor's market share."
Right. Just like Microsoft is eyeing Palm's market share, and despite Palm being pretty clueless, the best they can do is pull even.
Apple is a touch more clueful than Palm, particularly about consumer behavior.
2. Labels are not separating out their CD sales from downloads. CD sales are hurting, so the costs (and losses?) from that area are passed along to the pricing for downloads.
3. When you consider start-up costs, iPod and Napster may both start high on the cost curve. As their sales increase, the fixed costs become less important, and the total costs will start to look more like the variable costs alone.
4. Again, if even the download scenario means starting high on the cost curve, Napster and iPod may be charging too little for their download prices. Over time, as fixed costs (and past losses) become less relevant, the profit margin will increase. In the meantime, it's a tough sell to get a consumer to pay $1 for something they can get elsewhere for free.
-- SYS 64738 --
QUOTE:
"In the first few months of operations Napster has firmly established itself as one of the top two online music services in the country," he said. "Napster's sales of downloads and subscriptions continues to grow and the Napster brand continues to prove itself as a unique and powerful asset."
Everything is cheery and happy, and Napster is obviously about to conquer the digital music world with its unique and valuable assets. I'm 100% completely, entirely, totally, absolutely certain that Napster is going to be raking in the $$$$$ next quarter. They represent a glowing future of entertainment and the promise of new technology (like flying cars). Anyone who doesn't like Napster and its DRMd WMA files hates America and probably kicks puppies.
It sure beats iTMS, which is run by marxists, Linux users (they don't pay for software and are thus most likely terrorists), and known criminals (you did see that SuperBowl ad didn't you?).
"goes to pay the debts of the musicians who created the music in the first place"
Completely false.
Who pays for the debts? Why, the MUSICIAN, of course. Every band is given a budget that they use to make their CD and promote same CD. When the CD is sold to the public, all the money goes back to the record company until this debt is paid off. Every bit. The musician still pays for breakage, which hasn't happened since (a) they made vinyl records (b) It sure as hell doesn't happen in CD's.
The musician essentially works as a sharecropper on the RIAA's plantation.
Maybe that's okay, its not for me to decide. But please spare us the sob stories about the poor, undertrodden RIAA, because they're still making money. They can't lose under the current business arrangement.
But when the industry leader says there's no profits to be had and that they simply operate it as a loss leader for other more profitable divisions, that doesn't bode well for the latecomers who are racking up huge losses right out of the gate.
Consumer: We want DRM-free, high-quality, downloadable music, and we want it for less money per track than a CD.
RIAA: OK, you can have moderate-quality, downloadable tracks laden with DRM for the same price per track as a CD.
Consumer: Uh... nevermind.
RIAA: See? Music download services are not a legitimate business model!
Fred
"A fool and his freedom are soon parted"
-RMS
Wow, a business loses money in its first three months of launch. News at 11. They also say:
While maybe we don't want to believe them and they won't reduce these costs, it seems pretty likely. So saying "they don't" make any money is patently ridiculous, we don't have anywhere near enough data or time invested.
" At the beginning Microsoft did not generate revenue. No pure software company"
False false false. Microsoft was making a ton of money writing embedded basic LONG before MS-DOS/PC-DOS was a twinkle in Bill's eye.
When PC's started to become mainstream, virtually anybody who could use an assembler and write software was making money. The cost of entry was so low that you couldn't *NOT* make money. Software was copied onto cassettes, but in a baggy, and shipped right out from your kitchen table. The only cost was the ad in "CREATIVE COMPUTING".
Oracle...profitable from the START because Naval Intelligence gave them the money to develop an RDBMS. Oracle was always profitable.
Stop repeating crap like this.... some of us were there, the history is well documented in a million books. Your saying Software was intially unprofitable flies in the face of history and personal experience. In otherwords, you are about as wrong as you could be on the subject.
"So why is everyone acting so surprised that Napster isn't making a profit after mere months? "
Because it appears the record companies have set the royalty rate high enough that its impossible to make money selling electronic singles.
It looks to me that based on the royalty rates the record companies get, that the retail price of a song should be closer to $2.
Of course, if they do that, its worth just copying the file on kazaa or from a friend, so it defeats the purpose.
Bottom line... record companies are going to have to halve their royalty rates or face increased consumer backlash in the form of Kazaa and other P2P services.
That's a fact, son. That's a fact.
That they spent about 25 million in marketing.. business take time to make money, Napster is only 6 months old... not many business make money in 6 months.
As for all the people worried about losing their purchased songs, it is as simple as burning them to CD and ripping them back in whatever format you like.
Moron.
So once the public has grown tired of every song published in the United States before 1923 (or whatever the threshold is for works not being affected by repeated copyright term extensions in your country), associating with such songs the undesirable connotations of being terminally out of fashion, what do you expect to do then?
Besides, Beethoven wrote before copyright in musical works was nearly as strong as it is today. There existed nothing like a Bright Tunes precedent back then.
*Turns down di.fm* your music broke? that sucks. *Turns it back up*
He's not talking about some kid 3 or 4 generations down the line blasting Led Zeppelin in his bedroom. He's talking about scientists who may try to understand the long-since-fallen nation of the USA.
The vast majority of information regarding any time period tends to be tainted by the powers-that-be at the time (revisionist history) or lost due to sparsity. Should all of present day media be shackled with such short-lived technologies, then there would be nothing for those scientists to uncover that might paint a clearer picture of this era.
The problem with most of the perspectives of the "producers" and the politicians they manipulate is they assume the world of today will continue with only slight changes over time. History shows a much different perspective - ALL societies that have ever been before have fallen. Some spanned decades, some (as our present) evolved over centuries, some (Ancient Egypt comes to mind) endured for many thousands of years. All of them eventually fell (via war or other catastrophe) and after a period of disorder, or outright chaos, another social order built up in their place (with most of what was gone forever).
Considering the growing disparity between the wealthy and those in poverty today - and the increasing attempts to cement control by the former combined with the rapidly growing numbers in the latter, shows just how volatile our society is. How much longer until those once called Citizens, now called Consumers, are finally labeled with the inevitable Peasant. How long after that before the peasants revolt and destroy all that's been hoarded by the wealthy. There is absolutely no guarantee that the USA will maintain it's own social order, let alone the current "New World Order" as described by the first President Bush.
I don't wish to spark a left vs. right debate on today's social state. Despite what both conservatives and liberals claim are the causes and solutions to such ills, they do presently exist. The longer they persist, the longer the risk. I do not advocate any such uprising, I do not predict any such revolt, I simple mention that historically speaking - the risk exists. Should our present society fall into chaos, and most of what we've accomplished reduced to ashes and dust, only fragments of what once was will remain. If these fragments are useless due to DRM, there will be nothing truly left. That is what the original poster was asking - Why aren't archaeologists (and other scientists) speaking up about this risk?
I AM, therefore I THINK!
I guess I'd better convert these bleep mp3s into a normal format before it's too late! Wait...
Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?"
I think it's obvious that you crack the DRM. You paid for the music, you should get to keep it. Only an idiot would buy a CD that would stop working if the record store shut it's doors.
This is one reason that the anti-circumvention provisions of the DMCA are an indication that Sen. Hatch and cronies "just don't get it". If the tracks I legally pay for online may some day just stop working when the company fails, it's a reason for me not to choose their service. It creates an artificial barrier to entry into the legal media sales market when the law is trying promote and protect that market.
If we could legally crack the DRM on files we legally purchase to mitigate this risk factor, Napster's business model would be worth participating in. But since es ist verboten per DMCA only an idiot or a criminal could consider giving Nappy 2 or it's similar subscription cousins any business. It's not a good position to be in if you're a young company. This law is counterproductive.
Anyway... the only thing you can do if nappy 2 craps out and your tracks die is to circumvent the DRM. It's illegal, but thanks to Hatch and his hellians, that's the only way you're going to listen to the music you legally paid for.
"Let him go, Ralph. He knows what he's doing." --Otto Mann (simpsons)
"DRM prevents all of this"? Once you've burned them to CDs, how does DRM have anything more to say about it? At that point you rip the CDs to any format you wish, and no DRM.
Heard any good sigs lately?
The Listen/Real Rhapsody service model is possibly the best digital music model for these times. It is surprising how little it is advertised - every single user that I have come across loves the service and feel that the 10 bucks they pay per month is a phenomenal value. Targetted primarily at connected/broadband users its a buffet of music. Of course, it doesn't do as well when you start looking at how to get the music to go with you on the road. Here's a link to a recent review: Rhapsody Review
Here is the link to the service itself: Rhapsody
--
Attention record company appointed idiots ->
m l
http://www.theregister.co.uk/content/6/35260.ht
Just as my $20/month Netflix alleviates my *non-existant* guilt for possessing a huge divx collection, an opportunity to give $6/month to legitamize my MP3 collection would be good for my *non-existant* conscience.
that's a great point... due to DRM we might be the first civilization to not leave behind a viable record of its culture, knowledge, or even its existence. Archaeologists 2000 years from now will wonder what type of music we listened to, what type of movies we watched .... ehh.. you know what... i'm so embarrassed at the shit we watch and listen to that it might be for the best. I just hope DRM never catches on with books.
Stupid people make stupid things profitable.
Didn't we see this story in 2000?
"Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?"
Unless Roxio goes out of business completely, it is unlikely your WMA files will become unsupported. This sounds more like FUD from an Apple lover
Vote for Pedro
" Are we all so media-crazed that we always have to buy the latest single songs online? Do we fear that we're no longer cool, so we spend $400 on a jazzed-up Walkman? When the last brick-and-mortar store closes, when the last music-afficionado gets thrown out of work, when the 'hip' bands have been cloned to the point of utter whitewash, when the droids at BestBuy and cdnow.com have completed the assimilation, who will you turn to? Go buy a used CD, tape off the radio, or take your $400 and see 40 local band shows instead. Free your mind."
I agree $400 is a waste of money for a walk-man. However, $90 or so for a flashed based mp3 player is a good deal, and extremey small. Unless you absolutely must have your entire music collection with you at all times, thats the way to go.
To all you 'tards who replied to the parent post as though it were a serious comment intended to generate debate: This is a direct modification of an old Mac vs. PC troll. I mean... goddamn people.
YHBT. YHL. HAND.
You see, there is a classic Slashdot troll that uses to post a modified version of the parent post in Mac stories, both in Slashdot and Macslash. He usually says that it takes him 20 minutes to copy a 7 MB file in his G4 or G5, or something along those lines. The text is based on a comment made by someone in his webpage back in 1998 referring to a seriously ill PowerMac 8600.
On a second thought, the parent post is not a troll, but a parody...
That's coz all the best stuff is on gnutella.
This is a nonsensicval comment. The post is copyright because you wrote it and it's not a copy of any other works. That arises from copyright law not the GPL.
The GPL is the licence under which you as the copyright holder allow other people to make copies of the work.
But in any case by submitting the work to /. you subject work to the conditions applicable to posting therein. These luckily enough run along the same lines as the GPL but there may be other sites where this is not the case.
I didn't say that poor people today are as desolate as those in the past. What I said was the disparity is growing - the wealthy aren't just wealthy, their excessively wealthy when compared to the general population. I don't have the figures handy, but it's something like >80% of total wealth/resources is controlled by
The other half that I didn't get into is what you're referring to about public schools and draconian laws. The point though, who pushes and benefits by this state of affairs? The excessively wealthy who don't want to give anyone else an opportunity to unseat them at the top. So they encourage this type of environment: Make everyone "technically" a criminal in some manner (draconian laws), and ensure they don't 1) know any better (lousy public education) and 2) don't have time to change things even if they did understand (increasing work hours without compensation). Eventually, if not stopped and balance restored, they will push too far and the common folks will revolt. That's simply the way humanity has historically always worked.
I AM, therefore I THINK!
with its selection, i'm still glad i signed up with napster due to the 'all you can eat' subscription. i don't particularly care if i own the music as long as there is a lot of it and i can listen to it from a net-connected pc.
of course, if iTMS made a $10/month plan i would probably switch because of its library, large userbase, and hardware support.
Called DARWIN which is under OS X.
Also - another thing to keep in mind: what about the output? If its an USB based speaker there is nothing preventing you from taking the digital data from the USB cable...
As long as men will have no digital input, any DRM will fail. They just make it a bit complicated...
Don't worry, we produce such a large amount of media that I'm sure SOME of it will survive 2000 years.
I wouldn't be suprised to learn that they even find a harddrive 2000 years from now and are able to read data off it.
Perhaps someone could make a company that would seal CDs in black acrylic and argon.
Fellowship 9/11
You think your CDs are going to last forever? There have been a bunch of studies and corresponding articles that indicate that you shouldn't expect CDs to last more than 25 years. CDRs, typically even less than that, although being able to back up to CDR certainly can help extend that life, they'd better be good CDRs, and you're still having to expend money to ensure that the data remains (at some point, the cost will become equivalent to re-buying it). Storing massive amounts of music on hard drive is fine, but then you have to worry about hard drive failures. I guess RAID5 could help with that a bit ;)
Is it time to figure out what to do when your Napster WMA files go unsupported after Napster 2 dies?
Sure, use the age-old trick of defeating the copy-protection on your files: Get a 1/8" stereo mini-plug, and use it to loop from your audio to your microphone in. Then re-record all your music in a format that isn't crippled. You could even write a program to automate the process, although it would take as long to convert your files as your files are long in play time, unfortunately. But such is the nature of the analog 'last 1/2"' (distance between your sound card's audio out and audio in) solution.
The Right Reverend K. Reid Wightman,
Called DARWIN which is under OS X.
QuickTime is still proprietary. In Mac OS X, does Darwin handle audio output, or is it like CD burning on Mac OS, where userland has a more direct line to the hardware?
If its an USB based speaker there is nothing preventing you from taking the digital data from the USB cable
Except maybe encryption?
As long as men will have no digital input, any DRM will fail.
Hearing aid companies have developed cochlear implants to help the deaf hear. As these improve, perhaps some loser at some label might devise a composition to be played only through a cochlear implant. Then we're in trouble. Yeah, I know, mod me down so as not to give them ideas and all that ;)
I'm pretty sure that "MP3" is an abbreviation for "MPEG-3"... as such, I don't think the MP3 format comes from the MPEG-1 specification.
The point is that so many people assume that all AAC files are as restricted as the FairPlay-wrapped ones from the iTMS, and I think it's important to know that's not the case. Yes, AAC is a patented format, but so is MP3.
I'm a tad confused by this paragraph. It starts off comparing non-DRM'd AAC files to DRM'd AAC files (which is what iTMS is), but in the next sentence slides into a comparison of AAC vs MP3. It's not clear to me why the transition, unless the underlying supposition is that iTMS tunes are MP3 files, which they're not.
You can create your own AAC files, and play them wherever there's an AAC decoder, just like MP3.
True AFAIK, but somewhat misleading at the same time. While it is technically possible to create one's own AAC files and play them back in the sense that I assume the formats are documented somewhere alongside MP3, I have yet to encounter a single consumer implementation of an AAC encoding/decoding piece of software other than Apple's. Quite possible that something exists somewhere and perhaps even googling would find one without much trouble, but the point is that MP3 codecs are EVERYWHERE, including the decoders in lots and lots of differeent pieces of consumer hardware. I only know of one piece of consumer hardware that decodes AACs, which is the iPod.
- First they ignore you, then they laugh at you, then ???, then profit.
Hey I wonder if anyone over at Napster, Inc. ever throws money into the "honor system" coffee jar at their office...
Perhaps they might have done better business if they hadn't picked a dump name that sounds like something stolen from 'saturday night live'.
(it's the napster....making copies.....*smack*).
You missed his point. Digitized files are easily replicated, and thus can be moved from one medium to another quickly. He's saying that because he has works in the digital medium they have easily been moved from medium to medium to medium. I doubt he was making an argument for the longevity of CD-Rs or hard-drives.
FWIW, I have my own experience with that. On my Mac G4 with OS X, I have Word 2000 files that were originally written nearly 20 years ago with Appleworks 1.0 on an Apple IIe. Needless to say, my typewritten works from before our family got that first computer have long since turned to dust, but the digital documents have lived on.
That, my friend, is the parent's point. That is the magic of digitized data, and its longevity. The medium is no longer relevant!
Fair enough :)
;)
Still gotta worry about those EMPs, though
Yeah, well, I'm sure whatever cataclysm/catastrophe that causes the EMP will render the loss of mere data a moot point, at best. ;)
Electromagnetic pulses don't destroy data on CD-Rs because it is physical storage and not magnetic.
Finding something to play the files might be a problem, though. I don't know all that much about how much damage small electronic devices would take.
Programs such as StreamRipper32 already make it trivial to save shoutcast radio streams to mp3 files; I imagine this effect will be duplicated fairly quickly to save these streams.
Like someone else said, people are always going to find a way to get shit for free. The key to getting around this is making the stream radio quality. Ok, so people can save it, but do they really want to? At the same time, it is enough quality to give someone a good preview of the song.
Perl - $Just @when->$you ${thought} s/yn/tax/ &couldn\'t %get $worse;
Or, more correctly, "time of return to market" or "rebranding lapse."
How long has it been since the fall of Napster as a free service? Three years? The average consumer has forgotten the brand by now. No amount of ads or gift cards with the forgotten cat logo at markets and convenience stores will bring it back. That ship has sailed!
Hello Amy
I'm very disappointed that there's no picture of you in your web site! How can I know whether I should hit on you or not?
Please provide pictures. Thanks a lot!
Slashdot community, please notice: I am looking for a girlfriend.
Nave H. Weiss
Why aren't archaeologists (and other scientists) speaking up about this risk?
They have noticed the evolution of homo hackulus, a humanoid subspecies that tends to counterbalance the predation of canis riaatus and their subhumanoid cousins. Homo hackulus has developed the survival instinct of generating voluminous viable artifacts whenever canus riaatus threatens the carrying capacity of their habitat.
Ghandi used civil disobedience to free India from Britain. Moses used civil disobedince (and a few plagues) to free Israel from Egypt. Christian heritage managed to survive 15 centuries of Roman oppression and domination thanks to good people willing to engage in civil disobedience in order to preserve the truth. Martin Luther King, Jr., used civil disobedience to secure civil rights.
Millions paid the price of resistance with their lives, branded heretics, martyrs and malcontents. The Hollywood Empire in all its glory doesn't hold a candle to ancient Rome, Egypt or Britain. Americana, such as it is, will likely endure, if only in a museum, thanks to the efforts of those few gallant souls who refused to be oppressed without a fight.
All shackles, whether of iron or of paper or of software, must and will be broken. The human spirit must live free. Only Tyrants need fear the cry for freedom! Give us Digital Liberty, or give us Death!