Napster - Music Subsciptions Are Overrated

kevinbr writes "Napster has concluded that PC-based music subscriptions aren't a growth business ... because it's retreating from its core business. 'Six months ago the subscription music service had 830,000 subs, three months ago it had 770,000, and now it has 750,000. The company says that last drop was expected, because kids stop using the service during the summer. But it's not as if those numbers will swell this fall: NAPS projects only a 4% revenue increase for next quarter. So instead of talking up its core subscription business, Napster is now pinning its hopes on the mobile industry. Music on your cellphone may one day be a real business, but hard to see why Napster is going to be the company that will capitalize on it.'"

Comments

I could have told them that years ago

[Apple Acolyte]

Music subscriptions aren't valuable? What a revelation. Gee, do you really want to pay a monthly fee for limited (DRMed) access to music files, access which goes away if you terminate your service. That value proposition is exceedingly poor, unless you take measures to copy the files into non-DRM form.

Re:I could have told them that years ago

[JeTmAn81]

Actually, the value proposition is incredibly high if you're a music lover with eclectic taste. I use the service to listen to probably at least 40 new albums a month, and all it costs is about half the price of a single cd...per month. If I had to buy those albums I'd be spending at least $400 instead of $6. So yeah, the value's definitely there.

Re:I could have told them that years ago

[Isauq]

The problem with Zune (aside from it's price) is that, like it's older (and nicer-to-use) brother, the Toshiba Gigabeat S (They are, quite literally, the same hardware internally- firmware and DRM are worse in the Zune is all) You can't transfer your music to your player without the software that comes WITH the player (or WMP if you're feeling maschistic- last revision that came over my desk didn't support UMS mode, though I would really hope they had fixed this by now) because neither are actual mp3/vorbic/mpc/wma/flac players- all of your music goes through a process where the tags are stripped, the file is encrypted, and new tags are written in proprietary format (SAT for the Gigabeat series). If you're a linux (or at the time even a Mac user; fixed yet?), you're just out of luck. Forget subscription services, first let's get a decent player out on the market.

Re:I could have told them that years ago

[ghuytro]

The value proposition when it comes to digital music is not exclusively defined by "owning the music" or music files being "DRM free".

The value propositions of a subscription service are:

1) Having access to a vast catalogue of music
2) All you can download
3) Transportable to my portable media player
4) For a low monthly fee

What does $12.99 get you on itunes in one month? 12-13 songs? Songs that you own? Pfft, I go through that many songs in an hour or two.

I have over 1,000 CD's that I "own" and are "DRM free" yet I barely ever listen to them when I can just fire up Napster on my laptop, search the artist and play the album, or, download them to my MP3 player and play them in the car.

I've traded ownership for convenience and I'd hate to see that choice go away.

Re:I could have told them that years ago

[Anonymous Coward]

I pay $12.99 a month for unlimited music from Rhapsody to go. Well worth it in my opinion. $13 a month is less then the cost of a single CD or 13 iTMS songs and I have unlimited access to at least 3 million songs. I can load up my portable with as many will fit on it. If I want to "buy" a song that I can burn to a regular audio CD, I still can and they are only $0.79 cents a piece last time I checked. Using Rhapsody comes down to still being able to buy a song for under a $1, and only paying $13 more a month to listen to 3 million songs of my choice at any internet connected windows machine or on my portable player.
For teens that listen to the pop/rap/R&B group of the month, it is even a greater benefit because they no longer have to buy a CD that they will no longer listen to in two months anyway.

Re:I could have told them that years ago

[MobileTatsu-NJG]

"Can you say for certain that Rhapsody is going to be around next year? Or the year following? Say some lawsuit shows up, blows it out of the water and it ceases entirely."

Nope. Either I'll pack up and move to another service, or I'll go find the songs I really want to have and buy them.

"What are you left with? Not a thing. All your money that you spent on music is gone, and you have nothing to show for it."

Though I get what you're saying, that isn't quite true.

- I have found a LOT of music I wouldn't have found otherwise. (I've also found a lot of music I *don't* want or only found entertaining for a bit.)

- I've had the convenience of not having to worry about gigabytes of data or synchronization across multiple machines. This is actually what drove me to subscription in the first place.

- This is similar to my first point, but my music tastes have expanded. I hadn't really given 70's music a chance until it didn't cost me anything to try. I feel silly about that now, I understand why modern is considered crap.

- I've been entertained for many, many hours. I haven't bothered to sit around and do all the math, but I know I'm going through a lot more hours of music in a given month than I am with TV, and at 1/8th the price. I mean, yeah, the service could die, but that won't go back and undo all the entertainment I've had. Movies and TV are already acceptable to me in this regard, why not music?

I've gained quite a bit, I'm just not able to keep the songs.

That's why subscription-based services like Rhapsody and satellite radio don't make much sense to me. I expect they are great for DISCOVERING new music .. but I have plenty of means to discover music already that don't involve paying money. I recently discovered a group called The 69 Eyes because a song was playing on a random MySpace page that I stumbled across. I liked the song, analog-holed it (and the other one that was there), listened to them for a day or so, decided I really liked them, downloaded their album from iTMS, converted the tracks to MP3. Boom. Now I have the music in a non-DRMed format that I am fairly confident I will be able to enjoy in perpituity, whether some company somewhere else goes out of business or not. That's cool. For me, it's a matter of convenience. I do a lot of my music 'shopping' at work while I'm waiting for stuff to load. That 20 second figure I threw out earlier was literal. I have that song on any computer I'm using Rhapsody with. I understand your concerns about the business going tits-up. Heck, it'd suck for me if Rhapsody went down, I don't know if there's a comparable service or not I can switch to. The thing is, though, I've ALWAYS had that problem with whatever music choices I've made. What drove me to Rhapsody in the first place was a hard-drive failure. I lost my collection of MP3s. My laptop had most of them, but I had gotten lazy about synching across the machines, so I had to re-acquire some stuff. The capacity for loss is, at least, more under my control. But it doesn't go away. I'd be a lightning bolt away from loss. So I'd end up spending money on new HD's or writable media, then spending time keeping it all backed up, etc. Yes, I'd survive a company going out of business, but that's not all that enticing. On the flip side, as long as the business is afloat, I could suddenly materialize on the opposite coast of the country and still get at my music.

Okay, I'm rambling a bit. I apologize for that. Music has a different value for me than it does for you. There are songs I like, but I just don't want to go through all that effort any more to try to maintain a collection. (I wouldn't be offended if you called me a 'consumer' as opposed to 'collector'.) It isn't really gaining me much. I gave up the 'keep' part of the music and gained a much bigger and much more convenient library. If the service dies, oh well. It was fun while it lasted and my music tastes are broader.

Who even uses Napster anymore?

[InvisblePinkUnicorn]

Everyone I talk to refers to Napster in the past tense... "back when Napster was around" ... "I used to use Napster all the time", etc. Rather than fight, it gave in. That's why users have moved on.

Napster--Very Worth It

[Fierythrasher]

I really hope this doesn't mean Napster (and Yahoo and the like) are taking away the "all you can eat" subscription service.

I am a Napster customer with the all you can eat model and I LOVE IT.

I am sorry, but I do not want to pay $0.99 for a DRMed music file that I can only use on so many systems, etc. This buck-for-a-song model has existed for far too long and I have only bought four songs this way, through iTunes, and all four were immediately burned to CD and ripped back so I could stip off that horrible DRM.

So with the buck-a-song model it made me do something that probably made RIAA very happy--I bought CDs. I'm sorry, but on a CD I get songs for less than a buck each (while there are some I won't like, there will also be gems I may never have heard had I not bought the CD) plus you get cover art, a media that's higher sound quality than a digital downloaded file. It just didn't make sense to me.

Then look at Napster. Suddenly I had a LEGAL world of music open up to me. I was able to explore the libraries of artists who are somewhat less popular. I'd never have spent $12 for their CDs, but a "Download Album" button had me pulling down every song I could find and listening to it.

Moreover, it is VERY easy to strip the DRM from a Napster WMA. I am an iPod user and Napster WMAs won't work with an iPod (though I wish Apple would relent and add that as a firmware/software upgrade to the iPod). So I use FairUse4WM and, bam, now I have MP3s that play on my iPod. I still pay the Napster music subscription every month and if I cancel I will delete all those MP3s. I'm only playing while I'm paying, so I'm playing by their rules.

This model has weened me from buying CDs altogether. I used to have a $200-$300 per month CD habit. I'm not kidding on that, I have over 3000 CDs and just kept buying every month. But with Napster I don't need CDs, I just get what I need from Napster. It's saving me THOUSANDS of dollars every year.

And my wife and I have very different music tastes. She used to not get music she liked becuase she didn't want to spend as much on CDs as I did. Now for one low monthly fee we both have all the music we want.

Sure, sometimes Napster is frustrating. I was looking for some songs on there that were "album only", "purchase only", or not available at all. It's not a silver bullet. But it is DAMN close.

If Napster doesn't see it as a growth business, that's because WMAs aren't a growth format. If you could do a subscription format that worked on iPods natively then you would have a model that would grow with each iPod sold. PlaysForSure??? If you're basing your business model off of Zune sales, well good luck with that!

But anyone who reads /. on a regular basis should know how to strip DRM from any file using free tools. Given that can be done so easily, I really think we should spread the word to our less tech-inclined friends and help these all you can eat services become a "growth model" lest they go away and RIAA can roll in the money of a buck per song again.

Exit strategy?

[JoeCommodore]

Is that rumblings that they plan from exiting the subscriber music business?

I have one friend who really enjoys Napster's subscription service probably have 1000 songs he listens to. If Napster were to shut down the service I think there would be a lot of very unhappy customers.

I'm the exception.

[SanityInAnarchy]

As in, I'm one of the few people for which this would be a bad idea, as I basically refuse to buy DRM'd media for my own use. Partly on principle, mostly because it won't work on Linux.

But for most people, if you actually calculate it out, the DRM is the only bad part. It's otherwise a damned good model -- as others have pointed out, it costs about the same as satellite radio, but you get to pick what you want to listen to, and you can throw it all on a Zune (or any PlaysForSure player) and take it wherever you want, play it in whatever order you want, etc. At least a few people who use this have calculated for me how much each track/album they've downloaded would cost on iTunes or CD, and then how long they'd have to stay subscribed for the subscription to start to be a bad deal.

It was 15 years.

And I really don't think I will be listening to the same music in another 15 years. Some of it, yes, but I'll certainly be listening to other, yet-to-be-released music.

"But what if the service goes away???"

A legitimate complaint for something like Steam, where if the service goes away, you can't play Half-Life 2. There's really no alternative to that. But most of the music that's available on one service would be available on another, so they're basically a commodity. And Internet is fast enough that having to re-download them is entirely not an issue, assuming the interface is made slick enough. (Have it pretend they're already on my hard drive, so I can throw them in a playlist, then download them on demand.)

So yeah, the only reason I buy music by the song/album, and listen to internet radio, is because that all works on Linux, and generally isn't DRM'd, and I have the option of putting it on non-PlaysForMaybe players -- like, oh, an iPod. (Or an iPhone, or an Archos with Rockbox, or the Ubuntu machines down at our local radio station...)

Re:Napster is overrated

[nine-times]

Well the way I see it is this: buying music is good for times when you want to be able to keep the song, but subscriptions are good if you want to be able to listen to a bunch of different stuff that you don't necessarily want to keep. I have had guilty pleasure songs that I want to listen to over and over for 2 weeks, and then I never want to hear it again. Subscriptions would be great for that.

So I feel like the ideal would be some kind of a hybrid service. Like, let's say you pay a nominal fee for a monthly subscription, where you can download songs, listen to them, but if you drop the service, you can't take them with you. But then if you really like an album, you can buy it, the DRM get stripped, and you basically get to re-download it for free for life, even if you drop the subscription.

I might go for something like that. One of the things I don't like about iTunes is that, if the file gets corrupt, they won't just let me re-download it. Yes, it's happened to me. I know you're allowed to request a chance to re-download all of your purchases, but you're basically only allowed to do that once, and I don't want to do it for 2 songs.

But honestly, with me it kind of depends on how the whole thing was framed, and how the prices worked out. I wouldn't want to have to continually spend money just to keep my current music library from going away. On the other hand, I might be willing to spend *a little bit* of money every month in order to be able to get good recommendations and try music out to see if I want to buy it. There's some wiggle-room with me there.