HP Dumped Napster for Apple

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Posted by michael on Friday February 20, 2004 @04:59AM from the napster-is-dying dept.

Pieter Townshend writes "Found on GMSV: 'In the days leading up to Napster's re-launch last October, a deal that would have put Napster links on millions of Hewlett-Packard computers went bad. HP withdrew from the agreement at the last minute, its reasons for doing so becoming clear three months later when it announced a surprise partnership with Apple to feature the iTunes Music store on HP computers and sell Hewlett-Packard branded iPod music players.'"

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HP don't play that way, Microsoft. by ackthpt · 2004-02-20 05:03 · Score: 5, Interesting

]Hewlett-Packard] withdrew from the agreement at the last minute, its reasons for doing so becoming clear three months later when it announced a surprise partnership with Apple to feature the iTunes Music store on HP computers and sell Hewlett-Packard branded iPod music players.'
Which would make Microsoft unhappy and it did and for other reasons as well. That Microsoft took iTunes so lightly is a mystery.

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A feeling of having made the same mistake before: Deja Foobar
1. Re:HP don't play that way, Microsoft. by ackthpt · 2004-02-20 05:33 · Score: 4, Interesting
  
  In the same way that Microsoft took the internet lightly. Coming to a Theatre near you: Microsoft inbeds its music service in Windows $version.
  That Microsoft has to grow is a fact, that they keep missing the ball is evidence they were lucky with the OS and not terribly good business people besides that. Of course, they'll integrate a search engine with music service and eveything else into Windows is a given. That HP is playing maverick to Microsoft and Intel is fascinating.
  
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  A feeling of having made the same mistake before: Deja Foobar
i would love to have been a fly on the wall... by JWG · 2004-02-20 05:04 · Score: 5, Interesting

... during the HP meetings. I can think of so many reasons to dump Napster in favour of Apple, such as: DRM, WMA, and cross-platform compatibility issues. All of these are, of course, aside from the fiscal reasons to favour Apple. From my /. perspective, I wonder which technical reasons, if any, came into play.
Re:One reason why I think by vonPoonBurGer · 2004-02-20 05:06 · Score: 5, Interesting

I think the major reason HP jumped from Napster to iTMS is the iPod itself. Comparing the two music distro partnerships, I doubt HP saw much difference in terms of the profit potential. But selling rebranded iPods?? The margins on those things are huge! And they have serious cool factor going for them right now. It's no wonder HP would switch to iTMS, given the chance to tap the kind of hardware profit margins Apple is currently enjoying.
Napster's Public Image by PurdueGraphicsMan · 2004-02-20 05:08 · Score: 4, Interesting

One obvious consideration is the fact that Napster's name isn't exactly crystal clear in the public's eye. With all of the lawsuit stuff they went through back in the day, the name Napster has a lot of negative baggage with it. That alone would be enough to keep me from dealing with them.

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The guitars sound good, now give me about 10db more on the cow bell.
HP isn't dumb by scifience · 2004-02-20 05:16 · Score: 5, Interesting

I think that the reason HP didn't go through with the deal with Napster is that they aren't dumb. Anybody with half a brain can see that Napster is doomed to failure.
No company that has no source of generating any profit is going to exist. The only reason Apple can afford to do iTunes is because they are using it to sell iPods, which do make them money. Napster has no such device, and as such have no hope of staying in business for long. Roxio may have thought that they would sell CD burning software as a reuslt of Napster, but I imagine most people already have burning software that they are happy with.
I give Napster another 6 to 12 months, at best.
Re:One reason why I think by Patik · 2004-02-20 05:26 · Score: 5, Interesting

The problem with the $15 a month is, I don't want to have to pay if I don't use it for a month. As it is I have spent less then $10 a month on iTunes store (and this month I might not spend anything), for me it has been cheaper.
That's the same rationale I use for choosing my cell phone provider. My friends laugh when I tell them it's 25 cents/min, but since I only use maybe 30 min/month I'd just be wasting 470 minutes with a "normal" $30/month plan. And if I don't use it one month, my balance waits until I need it.
Reg article on HP and dropping the ball on tunes by plopez · 2004-02-20 05:37 · Score: 4, Interesting

http://www.theregister.co.uk/content/archive/34980 .html

This is an interesting article. It appears that Compaq had a good device for tunes before being purchased by HP. THe question is why did HP go and outsourced tunes appliance when it already had one it purchased from Compaq? Lack of faith in Compaq? Then why did they they buy Compaq? Did they even know it existed? Then the question becomes did they even know what they bought?

Interesting...

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putting the 'B' in LGBTQ+
Margins? by Gorimek · 2004-02-20 05:42 · Score: 2, Interesting

I've heard from several places that the iPods cost very little more than the plain hard drives that are in them, and thus have very low margins.

If so the business plan would be to run the music store without a profit, in order to sell iPods without a profit, in order to sell macintoshes. But that doesn't sound too smart, so I'd be willing to believe they do make money on iPods, and maybe what I heard only applies to the first models.

If anyone knows any more or less real numbers on Apples iPod margins, I'd be very interested to hear them.
5 reason of why Napstare will fail by brainnolo · 2004-02-20 05:44 · Score: 5, Interesting

As many pointed out, the first is certainly - They dont sell a player like iPod other's are: - User experience isn't at iTunes level - Napster history doesnt make it sound "clean" - They are not coming out with Pepsi caps :P - Doesnt work on Mac, that is the platform of artists since its creation. In my opinion HP doesnt want to break good relelations with Apple especially when they can enter in profitable business through Apple itself (last is the ITMS, but what about pro-printers?)
Interesting marketing by blackmonday · 2004-02-20 05:47 · Score: 3, Interesting

You'll probably mod me off-topic, but I walked into Target a few days ago, and I was walking by their electronics section and noticed that they are selling *Napster-branded* CD-Rs, CD boxes, media cases and such. The little cat logo and everything. I couldn't believe the irony.
Apple Domination... by oneiros27 · 2004-02-20 05:50 · Score: 3, Interesting

Actually, Apple has lead markets before. Anyone remember when the IIgs was the premier graphics and sound platform?

You still see a lot of Apples in graphics and sound industries, but Apple's not been so great about maintaining their niche. [I mean, hell, Photoshop, one of the reasons for having a Mac in the 90s was one of the reasons people didn't want to switch to OS X, as Adobe wasn't going to make the jump right away].

When I worked in we development, I saw us go from 6:2 mac:pc user preference, to their current 1:12. [As most of us mac users left... and the manager [one of the two pc users] kept hiring non-mac people] . Okay, that might be a bad for empirical evidence.

The real question is going to be if Apple can keep the lead, or become complacent, and have someone else take the market from them.

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Build it, and they will come^Hplain.
Question: by HoldmyCauls · 2004-02-20 05:56 · Score: 1, Interesting

How long before iTunes is running under GNUstep? That way we can have it under Linux, too!

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Emacs: for people who just never know when to :q!
Re:I am sad by the_2nd_coming · 2004-02-20 06:02 · Score: 3, Interesting

only the big PC companies...

Alienware and Apple do not do such things.

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I am the Alpha and the Omega-3
Re:Dog eat.. by R.Caley · 2004-02-20 06:25 · Score: 2, Interesting

napster loses again!
Their first business model was to encourage a generation to steal and leech money from the them as they stole.
Their new one is to get those same people to pay for what they have previously been encouraged to steal.
Born To Lose.

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_O_ .|< The named which can be named is not the true named
Re:Pay by month or each time? by shotfeel · 2004-02-20 07:02 · Score: 3, Interesting

Once that was done, I slowed down.

Reminds me of one of the other factors the RIAA seems to ignore when looking at sales trends. Many of us older folks have spent a lot of money not only on new music, but to replace all the vinyl we still wanted to listen to. I don't remember where I read it about a year ago, but it seems most of us have replaced everything we think worth replacing and have slowed our purchases to new stuff only.

IOW the upgrade gravy-train in over for the RIAA and they still haven't figured out how to maintain sales with only new stuff.
Re:$15 a month by bad+enema · 2004-02-20 07:32 · Score: 2, Interesting

I'm sorry, I always thought preference in music was a subjective matter. That's why I don't think the genres I like (which happen to be a lot of genres) "suck".

As for not looking hard enough, perhaps you're right. I was a lot more into music a few years ago in my teens, and I've found out that the farther away from mainstream, the more appealing the music out there is.
Re:$15 a month by letdownjournals · 2004-02-20 08:02 · Score: 3, Interesting

I used to think, "Man, what happened to music? There used to be so many great bands, and now they all suck."

Then I found my old collection of cassette tapes in my parents basement, all the 80's indie/alternapunk bands that I remember so fondly... Most of that stuff isn't so good either. But life was a lot more fun then, so the music seems a lot better.

Maybe I just hate modern bands because they're all younger, richer and having a lot more fun than me.
Re:iTunes!=Money by shark72 · 2004-02-20 09:53 · Score: 5, Interesting
"Why would HP deal with Napster? Song distribution does not bring any money. In fact, Apple claimed (in an old article on TheRegister.co.uk; sorry for no URL) that their iTunes online store did not bring any profit."

I think people are extrapolating way too much from Jobs' statement. When he stated that they were breaking even on iTunes and making the bulk of their money on the iPod, lots of Slashdotters have assumed:
1. That he was being fundamentally truthful (ie. not counting the entire iTunes/iPod ad campaign expenses as an iTunes expense, or similar shifting of numbers which companies do all the time)
2. That this is to be a permanent situation -- that is, that iTunes, unlike many other new businesses, doesn't have a bunch of startup costs like development and advertising which will go down over time, and that their cost of sale will remain constant (ie. they are not expecting fees paid to the record companies to every go down).
3. That the profit and expense model of any other given music download service is fundamentally identical to iTunes -- that is, the other vendors are spending the same amount on advertising, have spent the same amount on development and other startup costs, and make the same margins and have the same costs per sale.
Those who've run a business know that these are groundless assumptions. Extrapolating "song distribution does not make any money" based on a statement that Jobs made about Apple's own unique business many not be accurate.
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Sitting in my day care, the art is decopainted.
Re:Reg article on HP and dropping the ball on tune by filmsmith · 2004-02-20 10:37 · Score: 2, Interesting

Good luck with the iTrip. In my opinion, it blows goats. The signal is weak (because it pulls from the iPod battery) and blocks the control for the remote control. Also, when I took it on a car trip a month ago, I kept hitting the tracks for it and it kept changing the damn broadcast frequency on me! I know they say it's not supposed to, but it happened to me far too often.

After that car trip, I moved to the Monster iCarPlay. It charges AND broadcasts through the dock port. Plus, since it's pulling the broadcast power from the car, it can be stronger. I was worried that the lack of broadcast stations (Monster's 8 vs iTrips 112? I forget) would really do me damage in a big city. Yet since I've had it, I haven't had to change the station once. The signal is so powerful, it pushes out every other signal. Lastly, I've now got my remote hooked up to my iPod when I drive so I can tuck the iPod nice and safely away.

It costs $80, but after the $40 for the iTrip and $40 for another charger... well, the math is damn easy.

fs