Business Models: Napster to Go vs. iPod

CNet offers an interesting comparison between Napster to Go and iTunes. For $15 a month, Napster to Go offers over 1 million songs (access to which lasts as long as subscription is valid), while songs for iPod must be purchased and last 'forever' (but it takes about $10,000 to fill an iPod). Is Napster to Go the future of digital music distribution? Would moving to an all-you-can-eat model hurt iPod business and balance the power among authors, studios, hardware makers and consumers?" It might take $10,000 to fill an iPod with songs downloaded from iTunes or with music converted to MP3 from newly purchased CDs, but there's a lot of downloadable and legit free music out there, not to mention Griffin's RadioShark.

Comments

You can fill it for free.

[aichpvee]

Just get on the Napster 14 day free trial and convert their stuff to mp3.

Re:You can fill it for free.

[A Drake Man]

But that 14 day FREE Trial only gives you 11 MB to download. It wasn't like that always, but once the news got around on Slashdot about how to rip the tracks, they shut it down.

Re:You can fill it for free.

[LokieLizzy]

That was so last month. Napster enforced an 11mb-download limit for the 14-day trial after too much buzz spread about the winamp ripping device.

Re:You can fill it for free.

[ornil]

If you are OK with breaking the law, you might just download whatever you want from P2P and skip the whole rigmarole.

Re:You can fill it for free.

[Skynyrd]

I tried their 14 trial. What a turd.
The interface is clunky, everything is slow, many songs (usually one from each album) isn't available unless you pay extra and the downloading is slow.

I stopped using my 14 day trial about day 5.

I might consider using a similar service, but it would have to be put together better and it would have to have a wider selection of music. For example, there's a band called X that I really like. They put out 6 or 7 albums, and only one of them is available on Napster. Sure, they aren't super current and they were never huge, but they were a big enough band that their catalog should be available.

Re:You can fill it for free.

[daveschroeder]

Ah, slashdot.

Where the "screw and subvert legitimate businesses and content owners at all costs" attitude is considered "Insightful".

Re:You can fill it for free.

[jimbolaya]

Another Slashdotism: Any business model that can't somehow make a profit from thieving "customers" is "stupid" or "obsolete". Could it be, just maybe, that you people really should just stop stealing?

Re:You can fill it for free.

[IrishMASMS]

This battle regarding purchasing second hand CDs was fought a few years back - and we won. It is very legal to purchase used CDs, and is how my collection has grown to over 500 disks. I mis-typed - thanks for clarifying the situation.

Re:You can fill it for free.

[MysteriousPreacher]

Depends on what you define as an artist. I've played in a band and arranged some music in the past. Was I at that time an artist? This is entertainment. By the nature of the business, a vast majority will not be making much money out of it.

Your points are confusing and angry. So you're saying that any artist who makes money from their CD sales is already so rich that they don't need this money?

Since you understand so much about the record business, why not provide us with examples of these artists and the figures you looked at so you could come to these conclusions.

For someone accusing others of having no understanding, you seem to have a child's view of the world.

Re:You can fill it for free.

[Znork]

"Why is is to friggin' hard to just pay for music?"

It isnt. However, I dont want to pay for the marketing, the videos, the lawyers, the exec payscale, the parties, the execs coke habit, the payola, the execs cousins nephews marketing, videos, birthday party and coke habit and the execs cousins newphews floozies new wardrobe.

How can a music company refuse to release a finished recorded album from an artist selling platium on the grounds that it wont make a profit? How can it fail to make a profit? Where is the hard work and what is the honest buck? Pretty much anyone who can afford a car can afford to pay for a complete professional recording, and could make a profit from a few thousand sales at todays prices. How exactly does copyright benefit the artist and public in such a case?

I'd love to just pay for the music. But it appears that choice usually aint on the menu. Paying for everything _but_ the music appears to be the dish of the day. But that's monopolies for you.

Small Print

[BWJones]

John Gruber has good commentary on this here and here that cuts through the marketing to point out the small print.

Because "fees" never go up

[acomj]

Judging from cable and satellite radio subscription fees just keep rising and rising.
I would expect nothing less from the music rental services..

I have a feeling that renting your music will be harder and harder to get stuff you want. (like some bands charging more than 9.99$ for an itunes album..)

itunes "playlist" which users post there mixes is very clever. When you select a song, you can search for playlists with that song on it (more songs you might like..)

However the napster "try" part is a way to discover new music I might or might not shell out cash for. Then again alot of bands have sites with free downloadable mp3s..

If my free 3 month trial of XM radio has taught me anything (I bought a car), there is a lot of music out there I don't care for.

The thing no one ever seems to mention

[daveschroeder]

...about Napster. Explicitly, anyway.

Once you stop paying your $15/month or $180/year, which will likely become $17, and $20, and so on, in the future, you no longer have access to your music.

If you want to keep it forever - or burn it to CD or use it on something other than an approved device - you have to buy it for a dollar. Just like with iTunes.

Also, that money you're spending on Napster is 180 songs, or 18 albums per year, on the iTunes music store, that you get to keep forever. I suppose it just all depends on your usage style.

That, and whether you want to use the hard-drive based music player with 92% market share.

To say nothing of the fact that Apple will introduce a subscription plan if they need to, anyway.

Re:The thing no one ever seems to mention

[daeley]

They are 90% they are CD players.

Looks like yours skipped. ;)

Re:The thing no one ever seems to mention

[daveschroeder]

People argue that it's better to listen to music on Windows because it has a higher marketshare?

No. I assume you're trolling here - or mind-shatteringly stupid, one of the two - but I'll bite. Where did I say anything about listening to music on Windows? I said "the same fundamental argument that has been buoying the entire Windows platform for a nigh on a couple decades now". To even presume that has *anything* to do with listening to music assumes that my initial statement about iPod's 92% share of the hard-drive based music player market has ANYTHING to do with the sound quality of the music coming out of it. Since my initial statement didn't say that, and since my subsequent explanation made no reference to it - and since you continue to feebly derail the perfectly factual claim that iPod's marketshare stunningly outshines any competitor, and has done so in a comparatively small amount of time - I can only assume you're the idiot you seem to be.

Still, I have to assume that you agree with it since you seem to be using it as the basis for your own argument that the iPod's marketshare affects one's listening experience.

I never made any argument that the iPod necessarily "sounded better". Though AAC at a given data rate may indeed sound better than various other codecs at the same given data rate, that was not, and never was, the argument that was made. But the user experience of the iPod, and its tight integration with iTunes and the iTunes Music Store is so tremendously better than any other combination of player, platform, or music store that it's quite laughable. This, of course, has been confirmed by numerous reviews by anything from traditional IT press to the New York Times.

And, to anyone who even stumbled on the doorstep of a business school in a drunken stupor, by iPod's 92% share of its market.

Napster's model, whether implemented by Napster themselves or another company, will pressure Apple, there's no "if" about it.

Now I know I'm dealing with a real mental giant here. I alluded to that, quite specifically, in my first post when I said:

To say nothing of the fact that Apple will introduce a subscription plan if they need to, anyway.

Perhaps me repeating that for a third time now will drill it into your mind, eh?

Then, I said:

But, as I said, if the subscription model of a competitor pressures Apple, they'll release their own. And then it's goodbye Napster for the second time again, since Apple's model is invariably guaranteed to work infinitely better from a user's perspective, as has been shown time and again.

So far, your argument has been based on complete fallacy:

- That I'm arguing that an iPod somehow makes the music sound different, when I did no such thing (though the iPod makes it easier for the vast, vast majority of people to actually *listen* to their music), and

- That I failed to acknowledge a possibility that Apple might release its own subscription model. It indeed may, as I've said in the first post, the second post responding to you, and this post.

But it's not as clear cut as you think. Napster's business model - as shocking as this may be to you - may fail. And then what happens to your precious model? Oops, the last couple of years worth of downloads and $360 down the drain. So long, and thanks for all the fish. If - and that's a big if - Napster's model survives the oversight of the content owners (or, indeed if it even becomes profitable itself, another big if) - Apple may see fit to introduce its own subscription model, as I've said for, again, a third time now.

And then you drones can drool over the MacWorld videos of it when Steve Jobs announces that Apple will also offer a subscription plan. You'll think it's the best thing since sliced bread, but lots of us will remember how horrible you thought it was before it got the Steve Jobs Reality

Forget monthly payments

[Daniel_Staal]

Do we really want to pay for everything monthly for as long as we live?

I don't mind a monthly fee for something I'll use within that month, or that has a time-based cost component, but you try to bill me monthly for something where I can pay once (even a higher up-front fee) and you'll lose my business. It's not worth it, long term.

Re:Forget monthly payments

[Daniel_Staal]

But, if you look at the economics of it, really my descendants (should I ever have any) would be likely to get both cash money and iTunes files, rather than neither.

Monthly subscription do several things, in this setting: they limit the life of your music, they limit your financial flexibility, and they lock you into a particular vendor. I'm actually less worried about the first and last than the middle choice, from an economic standpoint. (Though they are something I like to avoid as well.)

Under a subscription model I can't decide that this month I'm just a little short, so I should skip buying any music. Or that there is a great investment, for only $20, which I have to have. Or that, this month, I'd rather watch another movie. Sure, $15 sounds like nothing. They add up though, especially over time. And when you are tight on cash anyway...

Look at it this way: With Napster to Go, I have to spend (at least) $15 a month on music. With iTunes/CDs, I can spend $15 a month. Or more. Or less. Or none. It depends on my situation that month. And that is good financial planning.

Napster can be iTunes too.

[rnicey]

It's worth mentioning that you can spend 99c / track at Napster too if you really like that model. So at Napster you have more choice. FWIW I think Napster is easier to use too.

All-you-can-eat model

[Krankheit]

I think this could go over quite well. An all-you-can-download plan where you can get as much as you want and only pay per month. Even if the general public won't download 14,000 songs in a month, they like the idea of being able to do something they probably never will do. This is why SUV's and all-you-can-eat buffet menus sell so well.

Buy vs. Lease

[seigniory]

I prefer the iPod model for the same reason I finance (purchase) all my cars. At the end of the day, when the payments stop, I want to have something to show for my money, er, lack of bank account.

Granted, if all you're looking for is a way to get a few crappy, er, "currently popular" songs to listen to for a week, Napster's your choice. If you're a collector like me, you wouldn't touch Napster with a 1,000,000' pole. :-)

Right....

[Anonymous Coward]

"Is Napster to Go the future of digital music distribution?"

No, FTP servers and underground P2P are. Morons.

Re:DRM quality

[AnFraX]

Pretty much all of the methods to remove DRM include re-encoding the WMA to something else. This takes even more quality from the recording than is already missing in the Napster version (they are encoded at 128kbps). Furthermore, it is damnned near impossible to do a digital re-encode nowadays. Microsoft has revoked the WMA-DRM licence from all the media players that allowed it to happen, including all but the most recent version of Winamp that only allows encrypted WMA output through DirectSound. No more using DSP plugins to write the data to the disk in a different format. The best you can hope for is something like Tunebite, which records the analog signal coming from your soundcard, which is not very good at all.

Existing collection...

[seadd]

This 10000$ to fill an iPod is a bit exaggerated - keep in mind that a typical iPod owner has managed to accumulate a considerable CD collection over time. I have been collecting music ever since CD's became widely available in my area, which means that I've had roughly 10 years to acquire more than 100 disks by the time iPod appeared. And that equals the capacity of iPod mini, even without breaking the law:)

Napster is...

[HaveBlue34]

...not iPod compatible. Thats a show-stopper for the 20 MILLION iPod users out there.

2 can play this game

[Skraut]

Ok lets say I'm the average Music Junkie, and oh 20 years old.

I can buy a song on iTunes for $1 and keep it for the rest of my life, lets just say thats 80 years.

Since the Napster songs go away as soon as you stop subscribing I need to pay $15 a month for the next 80 years. That folks, is $14,400.

Considering I still listen to my grandfather's 78's that price just keeps going up and up.

Old Versions

[MarthaStewart32]

You can still get old versions of winamp at oldversion.com The Update to 5.08 was the fix to WMA-DRM.

sure they do ...

[Heisenbug]

... that's the same comment that gets posted on here every time a subscription music service comes up.

The point could be equally well made about every other subscription service, though -- why rent city water that keeps getting more expensive and goes away when you stop paying, when, with a larger initial investment, you could dig your own well and have water forever?

The answer is, gee, they both make sense in different situations. It depends *how much* more expensive the initial investment is than the subscription, and whether the specific resource you are buying will always be sufficient, or it would be better to have a provider committed to keeping new sources available.

You acknowledged that it depends on your usage style, but I just wanted to drive this point home: pointing out that a subscription service stops when you stop paying for the subscription, and therefore is different from a one-time purchase, is no longer insightful. They're both different; they both make sense sometimes.

Personally, I pay $100 per year for Rhapsody. For me it makes sense -- there's no way I could purchase enough music for $100 to satisfy my needs, and downloading music for free would cost me literally thousands of dollars in terms of time spent. If it doesn't make sense for you, fair enough -- but don't act like it's a blinding insight to point out that I'm renting rather than buying.

Who wants 10,000 songs?

[FunWithHeadlines]

OK, I'm sure I'm going to get lots of replies along the lines of "Dude! I have 12,137!" Fine, you are the exception. I'm sure the vast majority of iPod users have fewer than 10,000 songs. Me? About 550. That's all I want. I have no use for another 9,500 songs. My collection grows slowly but surely, but it will take decades to reach the thousands at this rate.

Maybe I'm not typical either, but I'll bet the typical user is closer to 550 than 10,000. And how did I get my 550? Mostly ripped from CDs in my existing collection, plus about 90-100 bought from iTunes over the last year. That's $90-$100 for me instead of $15x12 or $180. And I get to burn them to CD if I want (and I do want), and keep them for as long as I want. My monthly bill? Whatever I happened to buy that month. Maybe $2 or $3 or even zero. The Napster math makes absolutely no sense to someone like me. I don't want to rent my music, I want to own it. It's cheaper this way too.

Re:Who wants 10,000 songs?

[jimbolaya]

Here's some more math for Napster:

10,000 songs at 4 minutes a song (on average) is 667 hours or almost 28 days of music. So basically, if you download 10,000 songs in your first month, you'd have to listen to music almost continuously to listen to every song.

Of course, it's ridiculous to assume you'd actually listen to 10,000 songs each month, but it's equally ridiculous to assume that iPod owners will actually fill their iPod completely, and that they'd do so entirely from iTMS rather than other sources such as ripped CDs.

I expect that Napster to Go will get a lot of pack rats; people who spend time downloading a ton of songs because they can, but who actually listen to a much smaller percentage of those songs. iTunes will be preferred by people that actually enjoy listening to music rather than hoarding it.

Re:Who wants 10,000 songs?

[buttersnout]

what people don't seem to realize is that napster to go is compatible with 3 players. They each hold 5 gb. So you can fill a 5gb player for $15/month. It seems rather unfair to compare this price to filling a 40gb ipod for good.

Re:DRM quality

[rogueuk]

It's a pain in the ass, but not very hard to write a program that records the DirectSound output.

Hell, I wrote one that lets you queue up a list of files and then the program will tell winamp to play each file and it will record the DirectSound output. It basically does what the no longer working outputstacker plugins did.

Of course the quality isn't going to be as good as some of the other services, but if you want a permanent copy of your "Napster music" instead of paying Napster $10-$15 each month for the privilege, you don't really have a choice.

Re:Until your subscription expires...

[nutshell42]

So what? There'll be a new subscription-service-of-the-week around. You didn't buy anything so you don't lose anything.

What happens if Apple goes bankrupt? No trolling, real interest because I don't know how it's handled. How are the certificates for the iTMS files managed? Do they have to be renewed? Can you transfer them from PC to PC without a central authority?

Re:Neither Napster nor iPod - just FREE GOOD MUSIC

[MP3Chuck]

Speaking of free good music ... I compiled a list of sites that host indie music, nearly all of which have completly free downloads. You can see it here. Worth checking out for anyone whose listening habits aren't limited to Top 40 Radio...

Re:another way to look at is AAC Vs WMA

[nutshell42]

Generally if you encode a wma and an aac the wma will sound like crap and the aac won't.

*BUT* that's not all that important in this case. Important are the sources, the professional encoder used (or not) by the store and the care they took.

c't, Germany's most prestigious computer magazine, tested a number of different online stores recently and the quality differences between different stores, all using wma at the same bitrate, were staggering. It was also remarkable that Sony's Atrac, that's normally not considered to be an exceptionally good audio codec, offered some of the best quality. Apparently it's not the codec bitstream that's the problem in this case but the encoders offered, especially the software encoder in SonicStage seems to be optimized for speed and apparently doesn't really care about quality. Other example: mp3. If you compare the Fraunhofer reference encoder to the latest lame you're gonna think you listen to two different codecs. IOW codecs important, encoders even more important.

Moral of the story: AAC may be better when we look at the freely available encoders but that doesn't necessarily mean that the differences aren't a lot smaller if we look at music stores or that the codec has to be clearly better respectively.

Re:Problem with both of them: Changing your hardwa

[michaeldot]

This is beyond true.
I know that apple's iTMS works only with the iPod as a digital media player.

Not true at all. When you buy from the iTMS, the music goes into iTunes, not to an iPod.

From iTunes, you can either play it as is or route the music to other places such as burning a CD, which lets you play it in a portable CD player, car player, etc. You can also rip that CD in both iTunes OR ANY OTHER MUSIC PROGRAM, to put on ANY OTHER MUSIC DEVICE.

It's really the convenience and hyperfast synching that confuses people that iTMS is ONLY for iPods, but it's more true to say that iTMS is a way of getting music into iTunes. Where it goes from there is still largely up to you. It's not forever locked onto an iPod when you buy the track.

Re:Until your subscription expires...

[MoneyT]

Certificates are local files, pulled from Apple servers. If Apple were to go bankrupt, assuming they didn't issue a universal authenticator or provide a method for removing the DRM, there are already programs to allow one to transfer their certificates without a net connection. Of course, even failing that, there's always the option to burn the files to audio CD and re-rip them.

When you "rent" and when you "buy"

[amichalo]

It all comes down to simple "buy" vs. "rent".

These decisiojns happen all the time - think of major purchases like a home or a car, there are both choices - 36 mo. car lease vs. buying the car - rent an appartment vs locking in that 30 yr. mortgage.

On the surface, looks like the answer is simple - offer both because there is choice and then you let the people decide - and that is a simple answer and I think that it is a good one.

But consider the flipside for a moment - these major purchases I just mentioned offer both models from a financial model too - not everyone can afford the downpayment and 30 yr mortgage, some people like a new car every three years and would rather rent. Point is, these comparisons aren't that comparable.

The original slashdot article was comparing business models and the problem with the $15/mo napster model is that there is no "rent-to-own" scenario. There is NO ONE in their right mind who would rather rent music for 20 yrs. versus buy the albumns they like for a lifetime - especailyl the way that music sort of picks you - we listen to the same 80's trackes over and over - country music, old hip-hop, whatever.

So perhaps the better model is a "rent-to-own" where you pay a lower monthly amount ($10) and you get X songs per month to download and Y ( X) to 'register' as your forever and they don't count against your X downloads next month and don't expire when you stop paying.

Vioa! You get to 'try' new music and 'keep' the stuff you like - all for one low price per month. And just like a cell phone, if you want more songs to get registered forever, just pay an additional fee - just liek a per minute fee over your air minutes.

Now right now the $0.99/track, $9.99/albumn model is WAY easier payment plan thatn my cell phone bill, but perhaps there is something to the convolated system AT&T, Cingular, SPrint, and others have created.

Re:Until your subscription expires...

[Leo McGarry]

What happens if Apple goes bankrupt is that you still have the CDs you made sitting on your shelf.

The whole "what happens if they go bankrupt" argument is a giant waste of breath, because nobody in his right mind relies on encoded files. That's just dumb. The first thing everybody who buys music on line does is burn that music to CD. With iTunes, that's free. With Napster, it's an extra per-song fee on top of your $15 monthly charge.

So all this talk about DRM is just a huge waste of energy. The real issue is cost. Napster costs more, period.

something that gets overlooked in all of this

[cyberworm]

Something I think that gets overlooked in all of this, is that hte iPod can function as more than just a music player. It can be (and from what i've read around here on /. is) used as portable storage for files photos etc. Wasn't LOTR saved to iPods during filming? Along with owning an iPod, there comes utility as well as function. I have actually gotten up to around 8000-8500 tracks on my ipod. Mostly because I've been collecting music since I was 16, not to mention my friends music, and checking out napster when it was illegit. I'm only 26 now. Maybe I'm uncommon, but I don't tend to delete music just because it's not in style anymore (Hall & Oates anyone?). Interestingly enough, I find that my 40gig iPod isn't nearly big enough. I'm going to eventually get a 60gig (or bigger iPod) sometime this year, because in addition to playing music anywhere I go, I can plug it into any computer and share information. Whether it's for helping a friend fix their computer, sharing the latest linux distro, a tv show, a movie, or whatever I may want/need at any given point. Saying that the iPod isn't worth it because it would take 10,000$ to fill it using iTunes, is incredibly short sighted and extremely misleading. Not to mention the fact that just because you have an iPod or any digital music player for that matter dosen't mean that you have to buy music online anyways or be locked into iTunes (ephpod anyone?). If I didn't have such a large music collection, I'd still want an ipod or some kind of digital music player because it simplifies things. Why carry around 20 cds (200$) in a large case (another 10-30$), and potentially scratch them (or the copies I've made), take a chance on having them stolen (that really sucks, I had 80 cds stolen from my car in chicago one time after comdex), or just in general mess with it. I can slip my music into my pocket and go. About the only thing I can't do, is let someone borrow a CD that I may be listening to, but I can always make a note to burn one for them later.
I'm not an apple fanboy (though I'm getting a new powerbook after having used PC's for the past 10 years now) I have to say there is definately a coolness factor in owning it as well as just the way it feels in your hand.

Re:DRM quality

[mike518]

hmmm... so let me get this straight...from what ive heard you cant keep the music only if you pay $15 a month, you cant even download all the songs from many albums (and many more albums are not available at all), you can only use the songs on certain players like from creative and dell (*cough* junk *cough*) and finally the songs are 128 bitrate WMA (mmm gotta love M$ style sub-tape quality encording). Not to mention that the program is clunky, slow and doesnt work with ipods (which has like 70%+ combined mp3 player market share)

and they claim Itunes is bad?

yeah... they are sure to win this fight, esspecially with their informative (aka stupid) commercials and trendy brightly ipod mini colored website (very original). "napster to go" is sure to sweep itunes and free p2p -- and then maybe it will cure cancer. /sarcasm

Mike

$10,000 to fill up an iPod...

[eclectic4]

...but it's always been that way, hasn't it? If an iPod was around 10 years ago, it still would have cost you about $9000. It's just the price of OWNING music, always has been.

Napster is different. It LOANS the music to you. So comparing them is like comparing *insert obligatory Apple dichotomy here*.

The price difference is still a choice for consumers. Do I want to be able to listen to that music after I stop paying Napster? If yes, then iTunes, if no, the Napster. Done.

No it's not

[TractorBarry]

> Is Napster to Go the future of digital music distribution ?

No it isn't. It's an absolutely crap idea.

The idea that I would buy a licence to listen to a piece of music is completely insane. What happens when Napster goes tits up ? Your expensively acquired music collection is lost forever. When "The Alternative Record Company" go bust my back collection of "The Alternative Record Company" CDs don't suddenly evaporate nor do they become unplayable. I can also rip any CDs I buy to any new formats that are invented so the music pretty much stays with me for life.

Sorry but my view on consuming is very simple. If I buy something it's mine to do with as I please. In other words I can pull it apart to see how it works, I can recombine it to make other things, I can use it in ways it was never intended to be used, I can even smash it to bits, shoot it or put it on a bonfire and burn it. It's none of your bsiness what I do with because I bought it. It's mine now.

Honestly anyone falling for this sort of crud deserves what they get. They deserve to get nothing for their money. They're idiots plain and simple.