Napster On the Block

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Posted by ryuzaki0 on Tuesday September 19, 2006 @08:32AM from the strong-balance-sheet dept.

Ars Technica has a good wrap of Napster hanging out a "For Sale or Partner" sign. With half a million subscribers (down from the previous quarter) and $100M in annual revenue, the company is still bleeding cash. El Reg pinpoints the trouble: "The subscription crowd – and Apple via iTunes – must fight over a few pennies per song in profit. More from the Vulture: "You have to wonder if Napster's customer base is really worth the effort for a company such as Microsoft or even Real. The Napster brand has all the gravitas of a Che Guevara t-shirt."

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Metallica? by corroncho · 2006-09-19 08:35 · Score: 4, Funny

Maybe Metallica would be interested in this fine venture!!!!
________________________________
Free iPods? Its legit. 5 of my friends got theirs. Get yours here!
Napster brand associations by EVil+Lawyer · 2006-09-19 08:36 · Score: 3, Funny

At one point the Napster brand might have had all the gravitas of a Che Guevara shirt. At this point it has all the gravitas of a Jar Jar Binks shirt.
1. Re:Napster brand associations by DurendalMac · 2006-09-19 08:38 · Score: 5, Insightful
  
  Maybe the Che Guevera reference was to show that only idiots who don't know what they're talking about use it, much like the twats who wear Che Guevera shirts?
Is this a surprise by gbulmash · 2006-09-19 08:37 · Score: 5, Insightful

Way back when the Napster brand was bought for a buttload of cash, I said it was a bad buy. The buyers thought the brand strength and name recognition would turn into cash when they rolled out a for-pay music service. But the people who used Napster to share music had moved on to Kazaa, Morpheus, and new ones when those got nailed or started barfing up spyware.

When Napster was finally re-rolled out as a subscription service, all of its fans had moved on. There was some advantage to the name recognition, but overall it had lost its chic, its cool, and its cred. It was now a bunch of suits wearing the hip little cat head and everyone knew it. The users who "made" Napster were either illegally sharing via different apps, were buying off iTunes, or were going to hold the new Napster service up to pinpoint scrutiny like an ant under a magnifying glass.

The term "irrational exhuberance" comes to mind. The people who bought the brand and built the new service got a lot of things, but didn't get *it*. Branding the service with the Napster name, while creating a certain amount of buzzz, also brought with it a certain amount of baggage, sets of varying expectations that would be hard to meet. And their declining numbers and murmurs of selling the business just go to prove that this was a bad idea that was not well-executed.

Greg

--
Start a happiness pandemic
1. Re:Is this a surprise by jdavidb · 2006-09-19 08:47 · Score: 2, Insightful
  
  The people who bought the brand and built the new service got a lot of things, but didn't get *it*.
  
  Yep. Newsflash to the buyers: Napster was popular because it was a great place to get music without paying for it. Other than that, there wasn't much draw. Other people are doing a much better job on the "pay to download music" model, so unless you can do a better job of delivering on that, or unless you're willing to go back to Napster's original model, owning the Napster name doesn't do much for you.
  
  --
  Secession is the right of all sentient beings.
2. Re:Is this a surprise by nine-times · 2006-09-19 08:56 · Score: 2, Interesting
  
  Besides all that, there's just the fact that there isn't money to to made from selling music online. Let me rephrase that to be completely accurate: all the money made selling music goes to the label. Not to the artist, not to the online store, but just the label. Companies keep thinking that they're going to make a truckload of money if they release the new online store, but there's no business plan for it yet. For the amount of money the labels demand, and the price consumers are willing to pay, there's just not enough profit margin for a business to be "successful". It reminds me of the 90s when everyone thought they could make money if they had a web site, but they had no business plan.
  The only reason Apple is "successful" is because they go ahead and run the store with basically no profit. On its own, the iTMS would probably be a failing venture, but because it's being used for marketing, "breaking even" is good enough.
3. Re:Is this a surprise by tompaulco · 2006-09-19 10:12 · Score: 4, Informative
  
  I have to agree with you. My stepson begged me to let him get a trial subscription to Napster. My first thought was "Hey, aren't they the guys who got in trouble for sharing music illegally. No way I am going to pay money for pirated songs." But some of my friends told me that they are strictly legit now. So I told my stepson he could sign up. Next thing you know, they are wanting a credit card...for a FREE trial subscription. Reading the fine print, it appears that they are going to charge me a full month, and then refund it if I don't like the service. Well, that doesn't sound like a legitimate business to me, and I wouldn't do business with them. But my stepson said he would pay for it, so I went ahead and paid the $20 or whatever it is for a FREE account.
  Then, he couldn't get the software to load. Turns out you have to be an administrator to load their software. What kind of crap is that? Is it an OS or something? So I had to install the software for him because there is no way I am making him an administrator.
  Next, he couldn't get the software to work. I found it worked fine on accounts with administrator priveleges, but not on ones that are regular users. This was the final straw, as there was no way I was going to give my stepson administrator priveleges.
  So I cancelled the account. I cited the fact that my stepson was unable to determine if their service was any good, because their software was not compatible with the Microsoft security environment.
  Then, they pissed me off by charging me $1.94 because I used the service for 3 days. In fact, in those three days we downloaded exactly zero songs, and only even got connected once or twice, while testing with an administrator account. They claim to have a 15 day or so free trial, but they actually charge you a prorated amount during that period, even though you can't use their software if you set up your security properly.
  I even got American Express after them to try to get the charges reversed, but Amex sided with them. If you get a free subscription, you should have to pay for it, even if you can't use it.
  DO NOT DO BUSINESS WITH THESE SCAMMERS!!!
  
  --
  If you are not allowed to question your government then the government has answered your question.
Finally! by RumGunner · 2006-09-19 08:38 · Score: 4, Funny

I'm glad someone is finally sticking it to that sell-out Che Guevara. His marketing campaign drives me nuts.
1. Re:Finally! by GNUALMAFUERTE · 2006-09-19 09:49 · Score: 2, Insightful
  
  From Wikipedia:
  
  An HDI 0.8 or more is considered to represent high development. This includes countries of northern and western Europe, North America, Republic of China (Taiwan), Japan, South Korea, Singapore, Australia, New Zealand, the Southern Cone, Israel, Kuwait and the UAE. Other countries that exhibit high human development amidst countries with lower HDIs include (with their position) Costa Rica (47th), Cuba (52nd), Mexico (53rd) and Panama (56th).
  
  Go check http://en.wikipedia.org/wiki/List_of_countries_by_ Human_Development_Index#endnote_2
  
  Also, obviously they are way better than the US in public health, and also in education, judging by assholes like you.
  Get your act toghether before you post.
  
  --
  WTF am I doing replying to an AC at 5 A.M on a Friday night?
2. Re:Finally! by Qzukk · 2006-09-19 10:00 · Score: 2, Insightful
  
  Compared to where?
  
  If you measure by "living through infancy", then compared to the United States. Cuba has a lower per-capita infant mortality than the US. Sad but true.
  
  --
  If I have been able to see further than others, it is because I bought a pair of binoculars.
Now they know... by stonedonkey · 2006-09-19 08:40 · Score: 4, Funny

...what it's like to be on the artist's end of the contract.
1. Re:Now they know... by merreborn · 2006-09-19 09:01 · Score: 3, Insightful
  
  Now they know...what it's like to be on the artist's end of the contract.
  
  That's the problem. Both the artist *and* the retailer get shafted (see: the recent collapse of Tower Records). The only people making money on this whole game are the labels.
  
  In fact, Weird Al recently pointed out that he, personally gets *less* from an iTunes sale than he does from a CD sale, thanks to his contract's "New Technology" clause. So even though the label's costs are *lower* for iTunes sales, they're making more, and *taking* more from the artist.
  
  The middlemen get everything. The retailers and the artists get nothing.
Gravitas means... by LotsOfPhil · 2006-09-19 08:41 · Score: 2, Informative

Maybe I am the only one who didn't know what it meant.
Gravitas is a Latin noun that ... conveys a sense of substance or depth of personality.

--
This post climbed Mt. Washington.
For those of us that have payed? by Gertlex · 2006-09-19 08:43 · Score: 2, Interesting

So what does it mean for those of us that have used Napster's legitimate service if it evaporates? Do we lose access to our songs once we get a new MP3 player or computer?

Yes, I bought DRMed stuff that I was having no luck finding elsewhere. And no ITunes isn't suitable for my needs: I don't use or want an Ipod. (SanDisk Sansa if you must know)
1. Re:For those of us that have payed? by sbjordal · 2006-09-19 09:00 · Score: 2, Informative
  
  yep. Check your contract.
Time to go... by tommasz · 2006-09-19 08:45 · Score: 2, Funny

...Web 2.0!

1) Change name to Napstr.

2) Profit!
Only On Slashdot by squiggleslash · 2006-09-19 09:00 · Score: 2, Insightful

Q: I've heard a lot about "business models", can you show me an example of a good one?
A: Certainly! A good business model is one where you provide a service without charging any money. For example, the original Napster would be an example. They did lots of research and development into their "file sharing" product, and co-opted the work of artists across the world to produce a product that people would want to use. How did they make a profit without charging anything? Answer: Volume!
Q: Ok, so can you give me an example of a bad business model
A: Sure. Just look at the music industry. They provide products (boo!) that people want, and sell these products to them.
Q: My gosh! How can they possibly survive with that model? Surely you profit more from giving everything away for free than you do by selling things
A: Quite right. This is why the music industry is unable to make a profit. Napster and other supporters of "sharing" have done what they can to change this around to no avail, even forcing the music industry to participate by, essentially, giving away their music. But for some reason, they don't like this, and keep running to the courts to tell people to stop!
Q: OMG! That sounds positively like a protection racket or extortion or something!
A: You betcha! Tehse... I mean these people are positively evil. They get their kicks funding the creation of new music and then charging people who want to own copies of it. Can you believe it?
(...and so on...)

--
You are not alone. This is not normal. None of this is normal.
I have the original Offspring Napster T-shirt... by CPE1704TKS · 2006-09-19 09:17 · Score: 2, Funny

In retaliation for Napster giving away free songs, the Offspring started selling t-shirts with Napster's logo on it. I got one during the brief time they were selling it. As the original poster said, Napster just isn't cool anymore unfortunately, so I can't bare to wear it.