Napster CEO: Apple iTunes, iPod ‘consumer-unfriendly experiences’

“Gambling on the residual affection for the Napster brand, software company Roxio bought the name as well as PressPlay, the doomed downloading service launched by Sony and Universal. Chris Gorog, a former executive at Walt Disney and now Napster chief executive, was brought in to help Roxio break into the entertainment business. ‘Now we’re in the process of writing the record industry cheques for millions of dollars, we have their attention,’ he says,” The Guardian reports.

“In the US, the download service launched by Apple last year to boost sales of its iPod music player has sold some 30m tracks at 99 cents each. It is credited by many with breaking the deadlock with record labels and making a consumer-friendly, easy-to-use download service a reality. It, too, is planning a summer European launch and the battle lines with Napster are being drawn. Apple uses its own download format: iPod owners can download songs only from iTunes. This leaves Napster in the odd position of being unable to sell music to owners of the world’s most popular digital music player,” The Guardian reports.

“‘Napster is a Windows Media Audio house designed around that digital rights management,’ Gorog says. ‘We are a believer in the technology and we believe it’s going to be, and basically is, the ubiquitous platform. Companies pushing a propriety agenda are consumer-unfriendly experiences because they’re cloistering them in an experience that they can’t leave and eliminating choice,'” The Guardian reports.

“Gorog believes pressure from iPod owners will force Apple to reconsider its stance: ‘The iPod is great if you’re happy to only shop at one record store. It’s like buying a car and finding you can only drive down one road. I think consumers, when they understand that, will be kind of pissed off,’ he says,” The Guardian reports. “Gorog points to how the brand retains enormous affection. He claims 92% of those polled in the US recognised the Napster brand and equated it with online music, compared with 27% for iTunes. ‘People still love the brand. We’ve been able to take Napster into a paid model but they still use the same adjectives to describe it – innovative, independent, cool, irreverent, renegade.'”

Full article here.

MacDailyNews Take: We would be remiss, after Gorog’s desperate bleatings for relevancy, if we did not point out that Napster 2.0, on February 23rd, announced they had hit the 5 million mark in online song sales. Or less than 1/10th of Apple’s iTunes Music Store. Inside Digital Media analyst Phil Leigh estimates that Apple is now selling 1.2 million songs a week, which he says would bring them to slightly more than 52 million total songs sold through the end of April. Adding Pepsi promo redemptions, Apple should be somewhere between 75 million – 100 million songs sold by April’s end. HP is due to soon begin selling all consumer PCs with iTunes, including the iTunes Music Store, preinstalled. (BTW: This means QuickTime will be installed as well on all of those HPs, as it is required for iTunes to function). Market-dominating iPod players work with the market-dominating iTunes Music Store. Not Napster.

“Napster is losing money, and top executives have left the company, including its president, chief financial officer, vice president of programming and head of corporate communications as well a key board member. On Wednesday, Roxio began laying off people at its Napster division. A Roxio spokeswoman said the company was ‘eliminating redundancies in the organization’ but declined to say how many people lost their jobs,” Dawn C. Chmielewski reported February 19th for The Mercury News. “Alex Luke, the long-time vice president of music programming, who left shortly after the service’s launch to join the rival Apple service.”

To sum up, what you are hearing emanating from Gorog’s pie hole are the sounds of Napster in its death throes.

[UPDATED, 9:55am: Used more current iTunes Music Store sales figures as per Atomic Bomb’s request.]

Related MacDailyNews articles:
The Guardian: iTunes Music Store should quake in fear of Napster – March 05, 2004
Forbes: Apple’s iTunes vs. Roxio’s Napster – March 01, 2004
Microsoft tries to push WMA by propping up beleaguered Napster – February 25, 2004
Napster 2.0 announces 5 million songs sold; pales in comparison to Apple’s iTunes Music Store – February 24, 2004
Apple iTunes Music Store dominates beleaguered distant number 2 Napster – February 19, 2004
HP considered Napster deal before Apple’s iTunes; Napster ‘is losing money, top executives’ – February 19, 2004
Napster 2.0 posts US$15 million relaunch loss – February 08, 2004
Napster Exec: warns ‘stay-off the Apple platform’ to MIDEM international music market delegates – January 26, 2004

57 Comments

  1. We would be remiss, after Gorog’s desperate bleatings for relevancy, if we did not point out that Napster 2.0, on February 23rd, announced they had hit the 5 million mark in online song sales. Or less than 1/6th of Apple’s iTunes Music Store.” – MDN

    1/6th? So you are using Jobs’ 30 mil figure, eh? But by February 23, iTMS had sold nearly 50 million. Don’t quote sales figures announced nearly 2 months earlier.

  2. Gorog should be THANKING Apple for not supporting WMA in the iPod or the iTMS! If they did, Napster would have been dead weeks ago.

    His comments in the interview show me that most of Napster’s customers are obviously iPod users who’re pissed that they can’t use their downloaded music on their iPods. If he were smart, he’d be negotiating with Apple to use AAC / Fairplay in Napster, instead of alienating his iPod using customers. What do you think?

  3. “1/6th? So you are using Jobs’ 30 mil figure, eh? But by February 23, iTMS had sold nearly 50 million. Don’t quote sales figures announced nearly 2 months earlier.”

    I would think that a large portion of the additional 20M was from the Pepsi iTunes giveaway. Whether you want to count those as “sold” by Apple it up to interpretation. I’m sure Apple is betting that evetually people will buy more songs than the one they get with the bottle cap. Out of curiosity, where did you get the 50M figure?

  4. The ubiquitous nature of WMA is exactly why Napster will keep losing money. Is there anything to keep customers buying there, rather than any of the other WMA services? In the meantime, although sales of other MP3/WMA brands are picking up, the real money is flying with Apple and the iPod. If Chris Gorog thinks he has the record companies attention with his sales figures, they must be lining up like dogs to get bitch-slapped by Jobs.

    My mini is just sooooo sweet. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  5. Updated article with more current iTMS songs sold figure. The Pepsi promo songs count as songs sold, just like “regualr” sales, since Pepsi is paying Apple per song. That’s how the promotion works.

  6. On the Mac, we’re limited to UPLOADING to the iPod using iTunes. Windows users can also use musicmatch.

    For downloading music which will work with iTunes and the iPod, we are currently limited to iTMS. That is beacuse other music stores offer music in only WMA format. If they used MP3 or AAC, iTunes would quite happily allow those songs to be uploaded to the iPod.

    So although Apple aren’t and have no obligation to help the competition, they haven’t eliminated the possibility of competition.

    People also have a choice to buy the CD instead, and ripping it (which I think is the sensible choice for music you plan to keep, purely for backup, artwork and sleeve notes.)

    Also not the iTMS isn’t available in the UK, so all the UK iPod owners have bought them without any real expectations of legal downloads being use to populate the hard drives. If iTMS tuens up, it’s just a bonus, and if Napster don’t sell compatible songs, then the only Napster are the losers.

    If Wippit get a Mac client sorted out, it will be perfectly compatible with the iPod as it uses MP3s. And Napster’s argument will be utterly blown away.

  7. The Pepsi/iTunes songs may count as sold since they “sold” to Pepsi by Apple. However, unlike exnihilo said, a large portion of the 20 million songs songs probably won’t come from the Pepsi promotion since the bottles have been slow to get to the market place. It took three weeks to get them in the Dallas/Fort Worth area and have been reported recently as just now showing up in the LA and NY metro areas. Those songs will definitely be over and above the 1.2 million a week figures.

  8. “He claims 92% of those polled in the US recognised the Napster brand and equated it with online music, compared with 27% for iTunes”

    He must have polled from a list of names on the RIAA watch list.

  9. Maybe instead of enabling a WMA feature on the iPod, there should be inculded within iTunes a “Convert and Import WMA as AAC”. That way, people who must use WMA will slowly be converting all those tunes to AAC, which they can put in their iTunes and iPod, thus still selling more iPods. I know there are many issues involved, so forgive me, I haven’t had my coffee yet.

  10. I live in D/FW and started seeing the Pepsi bottles and 7-11 cups everywhere within a week after the Super Bowl. However, I do know that most other areas of the country didn’t get them in bulk until the last week or two. Either way, the bulk of the Pepsi redemptions will occur from late March thru the end of April when the promo expires. You know how people tend to wait till the last minute. Napster has already been left in the dust and by the end of April, Apple will “only” be about 70-75 million downloads ahead of them by then. Gorog is just spewing nonsense and FUD in a desperate last ditch effort to save his own ass…

  11. “Maybe instead of enabling a WMA feature on the iPod, there should be inculded within iTunes a “Convert and Import WMA as AAC”.”

    That’s the best idea I’ve heard yet. I hope Apple is listening. Put an option to convert all these different files into AAC. Problem solved.

  12. Hywel: two things:

    1) if another online music seller used AAC, iTunes would NOT happily download those songs to iPod unless they used FairPlay. To my knowledge, FairPlay is the only DRM that iTunes understands.

    2) It’s like people in the UK are buying a car when they have zero roads to drive on. Tsk, tsk, tsk ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  13. has no one ever heard of wiretap? i download music or audio articles via WMA all the time, and convert them in realtime to .aif via wiretap – just rip ’em to .mp3 – it take 8 calories of effort to make it work.

    Pepsi is reporting less than 15% return on caps to date, with only 30% distribution (from [url=http://www.supplierprograms.com]http://www.supplierprograms.com)[/url] – thats only 4.5 million songs redeemed so far, and thats providing distribution isn’t stepped. probably more like 1.5 million.

  14. “He claims 92% of those polled in the US recognised the Napster brand and equated it with online music, compared with 27% for iTunes”

    No, he just quoted it out of context… the poll shows 92% equate Napster with *FREE* online music. Ask the same people if they’ve purchased music w/ Napster; bet it drops to 3%!!

    WMA is as proprietary if not more than any other format, so that’s a lame statement. Just because MS licenses it to Roxio doesn’t make it an “open standard”. So old MS FUD!! And as I’ve said a hundred times, all of this is vastly dwarfed by MP3.

  15. After buying a $400 iPod, you think I’m going to give a sh*t about which format it uses?! Get a grip, Napster-Roxio?

    Napster may have more roads to drive on, but they’re all out in the middle of nowhere!!

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