Napster To Campaign Aggressively Against iPod

rocketjam writes "Forbes reports that Napster plans an aggressive marketing campaign against Apple's iPod as part of its subscription service full launch later this quarter. Napster's service uses Microsoft's Janus technology to enable DRM protected music files 'bought' through subscription services to be transferred from a PC to a portable music player. Napster CEO Chris Gorog said the company is betting heavily that their monthly 'all you can eat' subscription service will win the battle for online digital music services, claiming, 'It's exactly what consumers want to do. Napster To Go is very similar to the P2P experience.' He believes the best way to market the service is to emphasize its advantages over iTunes and its iPod-only compatibility. 'We're going to be communicating to people that it's stupid to buy an iPod.' Maybe I'm too old to get it, but I fail to see the attraction of paying a monthly fee for as long as I want to have access to my music." Of course, if Napster To Go supported iPod, they'd have a much larger install base to convince to use their service, instead of still pleading people to buy a portable player with compatible DRM installed.

Comments

Subs *Is* Lucrative

[meehawl]

Apple has proven that the iTunes Music Store is a viable business model, with over 250-plus million sales to date.T

Subs work. I think I'd call Rhapsody's ~700K subs per month @ $10 a reasonable success. Real has around a 30% Q-on-Q growth rate. And its radio-like license model means that it gets to keep far more of each $10 sub.

Let's say Rhapsody keeps (say) 40% of its revenue. That's ~ $30m per year.

Let's say Apple gets to keep $.05 of each song. At 1m a day that's ~ $18m per year.

So you see, the subs business is a good one to be in. Add in the revenues from the satellite subs, Napster's 200K monthly subs, and the fact that the telcos are salivating to offer music subs services and aggregate the billing, and you see why the subs business is hot.

Napster may never eclipse Apple's pay-per-download download license gross, but its net take from the subs business could eclipse Apple's iTMS net.

Re:I wonder how much market research they did.

[ryanjensen]

Maybe part of the reason people aren't using iTunes to fill up their iPods is because it is too expensive ... I mean, one song, $0.99? Especially when they can get the song for free (not including the risk of prosecution) over P2P. How much do you *really* have to like a song to pay a buck for it?

I think we should wait a few months, once Napster to Go has established itself, and see how consumers really feel. Unfortunately for Napster, their subscription requires a new MP3 player purchase, one that is compatible with MS's new DRM model. So, let's give Napster 6-12 months and see how it works out before we declare them dead.