HP Dumped Napster for Apple

One reason why I think by mpost4 · 2004-02-20 04:59 · Score: 5, Insightful

Based on the last line of the article "But he expects the business will mature as users realize it's cheaper to pay a flat fee for access to 500,000 tracks than to pay $1 a song."

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. So if I look at it I have saved about $25 by not going with Napster. And since I am the only one in my circle at work that uses it, but every one here drinks Pepsi, I am getting free songs from my co-works (that or they would just trash the winning caps), but that is just a non-issue in the long run. With the iTunes store there is great integration into OS X and my iPod.

Also it does cost $.99 do download the song form Napster, so you have to pay for access then to download. From Napsters (www.napster.com) front page "Choose your own tracks for $0.99 each, or get the whole enchilada for just $9.95 per album."

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.
Re:One reason why I think by wo1verin3 · 2004-02-20 05:14 · Score: 5, Informative

>>Also it does cost $.99 do download the song
>>form Napster, so you have to pay for access
>>then to download. From Napsters
>>(www.napster.com) front page "Choose your own
>>tracks for $0.99 each, or get the whole
>>enchilada for just $9.95 per album."

You're confusing two different things.

Napster allows the following:

1) Subscribe for $10 a month and have unlimited download access to songs, you can not burn these but can download so as long as you are a subscriber. The vast majority of the library can be accessed by download but there are a select songs that are 'buy only'
2) Purchase a single track for $0.99. No subscription required.
3) Purchase a single album for $9.99. No subscription required. It's a one time purchase and not tied to anything else.
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.
Re:One reason why I think by Xaymot · 2004-02-20 05:29 · Score: 5, Funny

See what the man did to you? Now your chasing down other peoples' trash to snag some free songs. Its like when a GHB addict goes to Home Depot to sniff some thinner.

RC cola is better anyway.

Napster Sigma? by Pirogoeth · 2004-02-20 05:00 · Score: 5, Insightful

Even though they're under new management, I wonder if Napster still has a bit of a stigma to them that gave HP cold feet?

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Re:Napster Sigma? by oscast · 2004-02-20 05:02 · Score: 5, Insightful

I think it has less to do with stigma and more to do with which of the two companies provided a better solution.
Re:Napster Sigma? by Deathlizard · 2004-02-20 05:06 · Score: 5, Insightful

Doubtful.

The most likely reason is that Itunes store is the only store going right now that it showing success.

Napster is a great name. When people Hear the word "Napster" they think "Download Music". The problem is that their software isn't as great as it used to be and people are starting to realize it.

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AAC versus WMA by King+Elessar · 2004-02-20 05:01 · Score: 5, Insightful

AAC versus secured WMA, no big surprise here that HP decides to go with the non-MS solution.

Fly on the wall, eh? by Anonymous Coward · 2004-02-20 05:01 · Score: 5, Funny

Steve Jobs : We'd like you to use our music service, we'll even let you HP-brand the iPod.
Carla Fiorina : Nice idea but we've got a handshake deal with Napster and a cheque for $250K to make the deal concrete.
Steve Jobs : Here's a suitcase full of money, an iPod and a contract to let you do voice-acting in the next Pixar flick. Return the $250K and consider my proposal.
Carla Fiorina : Napster who?

I'm glad by andyring · 2004-02-20 05:02 · Score: 5, Insightful

I am happy to see that HP has some sense in this. Instead of picking Napster, which is doomed to failure, they instead went with a company who has a solid, proven track record of being THE industry leader in online music distribution and top-of-the-line MP3/AAC players.

Smart move, HP! Good on their part, good for Apple, and most importantly, good for the customer.

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

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.

$15 a month by bad+enema · 2004-02-20 05:04 · Score: 5, Funny

Equivalent to going out and buying a CD every month. With the rate of quality music being released these day, buying once a month is way too frequent for my taste.

Personally I have gotten most of the pre-Internet era music from Kazaa Lite, so paying $1 a song would suit my needs much better. Or I could just stick with Kazaa Lite some mroe.

iTunes vs. Napster by malchus842 · 2004-02-20 05:08 · Score: 5, Insightful

If I were in HP's position, I'd certainly be disposed to selecting Apple as my partner over Napster. iPods are wildly popular, and iTunes is a going concern run by a company that is a profitable going concern. If I'm HP looking for business partners, I am certainly going to select the one who looks like the way of the future.

Say what you want about Apple, but they keep coming up with great innovations and products that are slick, well designed and quite useful. HP made a very wise choice here and I think they will make a handsome profit from it. Not to mention Apple being "validated" by someone in the WinTel clique, and having a WinTel producer OEM their gear and install their software by default. This is win-win for Apple and HP, and not bad for consumers.

Yes, there is the DRM issue, but is it realistic to think that there will ever be a time when there is no DRM on material like songs? While I wish DRM wasn't necessary, Apple's license is pretty good - use on multiple machines, use on multiple iPods and burn them onto MP3 disks. Perfect? No. Good enough for the vast majority? I'd say so.

H-Pod? by Johnny+Fusion · 2004-02-20 05:11 · Score: 5, Funny

So, what will HP call thier branded I-Pod? I supposed they could go with H-POD, but then people might get confused. "H? But H comes before I, is it the older model?" Then I guess there is HP-POD, which could be pronounced "Hip-Pod", but then Steve Jobs would be all, "Waitaminute, Apple is WAY MORE Hip, than HP! OK so we both started in Garages, but I sold my my VAN, to start the company, a VAN, man. And Woz had to sell his Calculator! His Calculator, man, one of those nice Programable HP ones... oh, wait. OK"

--- Ready to be modded down this time...

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Re:H-Pod? by grub · 2004-02-20 05:17 · Score: 5, Funny

HiPod?

Just a thought. (if any HPers read this and use it I want one for the idea)

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Trolling is a art,

Napster's Client by bob670 · 2004-02-20 05:15 · Score: 5, Insightful

interface sucks, and their plug in for MediaPlayer 9 barely works, and fails completely with large fonts enabled. On the other hand, iTunes works perfectly, delivers on every aspect of the experience, from simple purchasing, sleek library management, fast searching and easy burning and sharing with authroized PCs and devices. Apple, as usual, delivers on user experience while solutions based on WMA deliver on inconvenience. I was a long time Wintel/Musicmatch user, but iTunes wins hands down. Buh-bye napster 2, buymusic.com, MusicMatch and whateve half-cooked dish MS will serve.

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:I am sad by yintercept · 2004-02-20 05:19 · Score: 5, Insightful

Personal, I am sad about the whole state of affairs in this industry. Basically, the computer manufacturers are choosing which programs the end user will use for listening to music, which antivirus software they will use. Each new computer that comes off the shelf is bundled with more and more ads and programs that monitor behavior.

The boxes coming out of the shop should stop being called "computers" and should be correctly identified as "ad delivery units."

Think about it... by ScottGant · 2004-02-20 05:24 · Score: 5, Funny

Dumped Napster

Dumped-Napster

DumpedNapster

Dumpster

It all becomes clear.

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"Music is everybody's possession. It's only publishers who think that people own it." - John Lennon.

The other problem. by mcc · 2004-02-20 05:32 · Score: 5, Insightful

But he expects the business will mature as users realize it's cheaper to pay a flat fee for access to 500,000 tracks than to pay $1 a song

But then the question is, what happens as the users realize it's even cheaper to listen to the internet radio built into iTunes for $0 a month.

Okay, yeah, you can't choose exactly what song you hear next on internet radio. But generally, if I go "hey, I want to listen to X specific song", this indicates I'm going to want to listen to it again someday in the future. Unless I keep paying for Napster's streaming service for the rest of my natural life, I can't get that. Perhaps worst of all, last I heard not *all* of the songs Napster has up for sale are free to stream when you have the $15/mo service, and there's no way to tell which songs can and can't be streamed unless you've already paid for the service. ...well that's encouraging.

The $15-to-stream-from-our-library thing is a really neat business proposition, and I'd call it real innovation, but I just can't see buying it. I'd rather just stick with actually buying in some form the tracks/albums. And if you're only looking at buying tracks/albums, Apple's software works both on my macs and my PCs, and they seem to have a bigger and more indie-friendly library. I think I'll stick with them.

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Re:Huh!? by Kenja · 2004-02-20 05:34 · Score: 5, Funny

"AAC has DRM too",

But its Apple DRM. Which is good for some reason. Unlike Microsoft DRM, which makes baby Jesus cry.

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"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting 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?)

Re:Huh!? by pyros · 2004-02-20 05:46 · Score: 5, Informative

I know it was half-joke, but it's not that Apple DRM is good, it's that Apple's DRM policies are recognize fair use rights. The only serious complaint I have heard about the format you get from iTunes is that you have to burn to CD and then rip that to get MP3, which results in potential loss of quality. But the ausio CD you burn from the protected AAC file is a redbook compliant audio CD with no restrictions on it.

Re:Margins? by EvanTaylor · 2004-02-20 05:56 · Score: 5, Informative

apple makes about 27% profit margin on all hardware, ipods included. Their PR for investors explains this.

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Sleep is for the weak.

HP Ipods by Enfurno · 2004-02-20 06:30 · Score: 5, Funny

So now im guessing any ipod I buy will be bloated with extra software to check the integrity of my mp3's, give me weather updates, and provide easy online customer support... just what I was looking for.

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Re:Huh!? by TALlama · 2004-02-20 06:32 · Score: 5, Informative

Actually, the newest versions of WMA DRM don't work on OSX.

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- The Amazina Llama

Re:Can't be by vonPoonBurGer · 2004-02-20 08:10 · Score: 5, Insightful

Obviously Apple's not giving away to iPod design without getting something in return. For every iPod HP sells, they're going to have to give Apple a cut. So, HP won't be able to make as much profit per iPod as Apple does, but HP has much larger distribution channels than Apple, especially outside North America. There's a lot of interest in tapping emerging markets in eastern Europe and parts of Asia (especially China). By partnering with HP, Apple can get in on that action without having to spend money up front to increase production capacity and develop distro channels overseas, where it currently has little of either.

Apple could likely make more money in the long run by building overseas production and distribution capabilities, but it would require a huge investment up front. Apple does have lots of cash on hand (close to $5 billion!), but right now time is far more of a concern for them. They want to establish themselves in as many marketplaces as possible, as fast as possible, before competing MP3 products get there. It would be no use for them to spend all kinds of money breaking into new markets, only to find that some other vendor has been saturating that same market for six months already with cheaper (albeit less cool) competing product.

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:

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)
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).
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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