Why ‘Napster To Go’ will flop

“On the surface, the To Go model looks like a great replacement for Napster’s previous subscription service. In the past, customers had to pay a monthly subscription fee that allowed them to rent as much music as they liked. Users then had to pay extra to download permanent versions of songs that could be transferred to a device or CD. Now, $14.95 per month lets you download as much music as you like to your computer and/or device,” Ashlee Vance writes for The Register. “The big detractor, however, is that you still don’t own the music. You rent it. Stop paying the Napster tax man, and all your music disappears.”

“This forces you to make a choice between quantity and permanence. Pay Napster every month and gain access to an almost limitless supply of music or buy select CDs, as you have in the past, and own them for years,” Vance writes. “From where we sit, the math doesn’t break down terribly well in Napster’s favor.”

Vance looks at a number of hypothetical customers and finds Napster To Go doesn’t really work very well for any situation.

Vance continues, “Even Napster seems to realize the vacuous nature of the deal. ‘A fully-integrated marketing program will support the release of Napster To Go, led by a currently-under-wraps February 6, 2005 Super Bowl television advertisement,’ it says in a press release. ‘This will be complemented by the new ‘Works with Napster To Go’ logo program that enables consumers to easily identify Napster To Go compatible MP3 players at retail.'”

“What is this marketing program integrated into? Is it possible to have a partially-integrated marketing program? Are we to be excited by logos now? When the bullshit generator goes this far into overdrive, you know there are problems,” Vance writes. “Napster plans to spend $30m to promote this new service. That’s a cute total if you consider that Apple made close to $14m a day last quarter in iPod sales, shipping 4.6m devices. The only money to be had in this market is in the hardware, and Apple has it all locked up. Here’s hoping consumers will see the light and Napster To Go will go away.”

Full article here.

MacDailyNews Take: Ditto.

Related MacDailyNews articles:
Napster CEO: We’re ‘the biggest brand in digital music, much more exciting than Apple’s iTunes’ – February 03, 2005
Napster tries to push music subscription service over pay-for-download iTunes-like model – February 03, 2005
Apple Computer could sell 21 million iPod shuffle units in 2005 – January 19, 2005
Cornell University’s Mac users ‘uniformly unhappy’ with Napster – January 19, 2005
Analyst: Apple’s iTunes Music Store ‘downloads could reach 474 million in calendar 2005’ – December 17, 2004
Study: Apple iTunes Music Store dominates with 70 percent market share, second place Napster holds 11 percent – October 19, 2004
Cornell University wrestles with Napster’s exclusion of Mac and iPod-using students – September 08, 2004
Why are Cornell’s Mac students being forced to pay for useless Napster? – September 07, 2004
Napster schools to Mac-using students: bend over and take it – September 04, 2004
Napster CEO: ‘it would be great’ if Apple iPod supported WMA – March 09, 2004
Napster CEO: Apple iTunes, iPod ‘consumer-unfriendly experiences’ – March 09, 2004
Microsoft tries to push WMA by propping up beleaguered Napster – February 25, 2004

43 Comments

  1. Great article. It’s good to see viewpoints like these in mainstream media.

    Brought to you by the magic word into, as in “Apple’s going to jam the knife INTO Napster’s back!”

  2. Me, I’m still interested in a subscription service. Not as a means of purchasing music but as a means of previewing and exploring music. I’d be willing to spend $15 per month to review as much music as I could ever wish for. When I find a new artist I like, I have no interest in downloading the poor quality of ALL compressed music. I’ll go buy the CD thank you. Unfortunately, I want it on my iPod and Mac. Not on my PC or some other music player so I have to hope that Napster is successful enough for Apple to decide to pursue a similar service.

  3. “This will be complemented by the new ‘Works with Napster To Go’ logo program that enables consumers to easily identify Napster To Go compatible MP3 players at retail.”

    What is it with the Windows world and logos and stickers? They are obsessed with them like 12 year old girls.

    Now they can have complimenting sticker sets with their eMachines PC and their Dell Junkbox!

  4. OH puh-leeez! ANOTHER logo -validating program? “Plays for Sure” and now “Works with Napster-to-Go”. BY the time all of these companies slap their seal of approval on future digital mp3 players, they will have to increase the size of player and the box so that you can read all of the logos.

    hahahahaha. This is too funny.

    keyword = rest, as in Napster should give it a rest already

  5. Frank,

    Here’s the math:

    If you are 20 years old, own no music, and are going to live until you are 75, the cost of renting assuming a historic rate of inflation of 3% is $24,411.

    If you assume you will buy about 840 CD’s in your life, the cost is around $12,591. (Again allowing for inflation.)

    So, you’ll save over $11,800. Plus most people own far less CD’s than 840.

    Napster is playing math games. They are saying it costs 10 grand to fill an iPod, but that is misleading. Most people buy albums and already have music. No one fills an iPod with individually bought songs.

    Plus, as I just showed you, there is a break even point when renting just becomes more expensive than buying.

    Finally, you own your music. You can do with it as you please. (Even Apple’s DRM is notoriously weak. Apple winking to its customers.)

    I hope this was helpful.

  6. I particularly liked this phrase:

    “Customers do not, as Napster suggests, pay $10,000 to fill their iPods with 10,000 songs just because the capacity is there.”

    Why can’t more analysts or experts pick up on this fact.

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