“Once again, Apple’s iPod is expected to be the hottest gift of the holiday season. That should be great news for the recording industry, right? After all, many of the 10 million or so new iPod owners surely will rush to Apple Computer Inc.’s iTunes Music Store to load up on songs,” BusinessWeek reports. “Apple, which launched the digital music revolution, may now be holding it back. Critics say Apple’s proprietary technology and its refusal to offer more ways to buy or to stray from its rigid 99 cents a song model is dampening legal sales of digital tunes. ‘The villain in the story is the iPod,’ says Chris Gorog, CEO of Napster Inc., which sells both subscriptions and downloads. ‘You have this device consumers love, but they’re being restricted from buying anything other than downloads from Apple. People are bored with that.'”
BusinessWeek reports, “Apple will continue to take flak. That’s because an army of companies has rolled out new ways to provide music — from legal peer-to-peer sites to established players such as Real Networks Inc. and Napster that offer all-you-can-play subscriptions for a monthly fee. The thing is, very few work with the iPod. “I have half a million subscribers who would love to use an iPod with my service,” says Napster’s Gorog… Still, subscriptions are a tough sell to mainstream customers. ‘The concept of a jukebox in the sky is not something most consumers intuitively get,’ says Dan Sheeran, a senior vice-president at Real. If Apple came in, it could change the game.”
Businessweek reports, “Then there’s pricing. Three music companies have publicly pressured Apple to loosen up its 99 cents approach. Jobs is convinced that having a simple, acceptable price is crucial to lure music fans away from free file-sharing sites. ‘It might make sense to raise prices in the future,’ says a source close to Apple. ‘But now is not that time.’ …So will Jobs change his tune? Not unless he has to. Apple can barely keep up with demand for iPods, which reap as much as 25% gross margins, vs. minimal profits for each iTunes track. So right now there’s no reason for the company to alter the way it sells music or make its player compatible with other services. But if download sales don’t bounce back, music companies could start looking beyond Cupertino for answers.”
Full article here.
As is its CEO, Napster is a joke. According to Gorog, people who buy iPods are “stupid.” So, now he wants “stupid” iPod owners to use Napster? Calling customers that you desperately want “stupid” is an interesting marketing strategy for an outfit that’s hemorrhaging cash. If Gorog really want to save Napster, he should forget about the music service and turn his focus towards making Napster-branded iPod accessories instead.
We have to wonder if Gorog has done the math. Sour grapes from a struggling outfit that’s getting steamrolled by Apple change nothing. Apple isn’t holding back the music business, they’re revolutionizing it. People aren’t “bored” with iTunes, obviously. Napster just wants you to think that, of course. When Napster makes it’s weak service with half the music library of iTunes available to both Mac and Windows users, like Apple’s inclusive, cross-platform iTunes Music Store, then maybe Gorog can shoot his mouth off a bit. Until then, he should just continue to silently helm Napster’s march into oblivion. Gorog’s incessant whining is unseemly.
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Related articles: Do the math: Napster posts $13.6 million second-quarter loss – November 02, 2005
Napster President: Apple CEO Steve Jobs has ‘tricked people into buying a hardware trap’ – August 22, 2005
Apple’s roadkill whine in unison: ‘incompatibility is slowing growth of digital music’ – August 12, 2005
Napster: the only thing missing is the sock puppet – August 04, 2005
Napster, other Windows Media-based music services ‘chasing a niche opportunity’ – June 29, 2005
SmartMoney: Napster is a snooze, gushing money and renting music is un-American anyway – July 06, 2005
Napster To Go Soon? Reports $24.3 million net loss on $17.4 million net revenue – May 11, 2005
Napster is a joke – April 05, 2005
Napster CEO Gorog: Steve Jobs ‘must be pretty frightened’ of Napster To Go – March 14, 2005
Napster’s math does not add up – February 28, 2005
Users thwart Napster To Go’s copy protection; do the music labels realize the piracy potential? – February 15, 2005
Napster CEO Gorog: ‘it’s stupid to buy an iPod’ – February 10, 2005
$10,000 to fill an iPod? Napster’s going to end up with egg on their face – February 04, 2005
Why ‘Napster To Go’ will flop – February 03, 2005
Napster CEO: We’re ‘the biggest brand in digital music, much more exciting than Apple’s iTunes’ – February 03, 2005
The de facto standard for legal digital online music files: Apple’s protected MPEG-4 Audio (.m4p) – December 15, 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
Napster 2.0 posts US$15 million relaunch loss – February 08, 2004
Damn, that villian the iPod. They tricked me into buying two of them. Now I’m really screwed because the only way I can get music is to:
Buy CDs (mostly used ones) and rip them
Buy music from iTMS which I do occasionally
Buy music from other online stores that don’t use DRM
Use p2p , Usenet or IRC if the RIAA insists on using DRM on everything
Apple started this revolution. I’m bored with all the whining coming from the me too’s of the world.
Why do they have a caveman CEO? Wasn’t Gorog one of the characters in ABC’s “Land of the Lost” back in the late 70’s?
I think Business Week has the wrong title for the article. It should be along the lines of “Falures in Digital Music Want Cheese with Their Whine”
I think the comment that is striking is that if digital sales don’t increase, record companies will turn away from Apple. Why would record companies turn away from the company that has the most players? I think they underestimate the number of people who burn their CDs onto the devices and buy the occasional tune from iTunes. Most people just want the device that works and everyone else has. That’s the iPod, and it’s going to remain the iPod for the forseeable future. You don’t lose market share that quickly. Co.’s like Napster are just upset they’re not part of the gravytrain. They picked the wrong side to be on and are now paying for it.
Who needs a subs service when you can use Pandora for free instead ?
Jobs gave them a chance to be partners, but greediness got the best of them. Now it’s “sour grapes” times!. Link your wounds Goroc!
you guys don’t actually believe that because Apple jump started this market they are the only ones that can help it move forward?
APPLE IS HOLDING BACK THE INDUSTRY. for the simple reason that they control everything and limit innovations. There are several other companies out there that could be working on ways of improving DRM or iTunes, or even the next MP3 players. but because Apple is not licensing the technology, companies are limited to iPod accessories. (how fancy is that?) and at that, they are requiring that the companies pay a tax to carry “Made for iPod” tags to their products. Is that a way to treat your partners that will in the long run strenghten your products? i don’t buy it.
Personally, i believe we would have had DVR, and Movie downloads already had Apple open up their interface. Instead we are having to wait a couple more years untill Apple introduce their own products. 2 years. that is 2 years i am having to wait since i just got my original iPod. WTF…
anyway, i am not buying this kool aid that you guys are selling. All Apple products are not the best. and they should not be the only ones. Open market encourages innovations. Not MONOPOLIES.
And No I am not a fan of Napster, Dell DJ, or M$. or a troll.
And i do love Apple products. i just hate that they think they are the alpha, and omega of everything. Please..
I don’t want “improved DRM”. I don’t want any DRM at all. Apple isn’t the problem – DRM is the problem. DRM is what is holding everything back. The RIAA and MPAA are the ones who have to have DRM to restrict content from being played on different devices.
How can Apple and the music companies not be making money from iTunes? I can buy a chart CD in the shops for almost the same price as it is on iTunes (about £1 more). Yet there is no shipping, staff, rent, markup or the cost of making the CD in the first place with iTunes it’s pure profit. The record companies want to take the pi$$ with pricing Steve Jobs knows it so do we.
Cheers,
Tim.
uuunnhgg–caveman comments not funny– they make Gorog angry..Gorog now smash you and all you villian ipods..arrrrghhhhh!!!
@Hywel:
Interesting you would mention Pandora. I just discovered it today. Nice service.
Me Gorog. Me hate iPod!
This is sad, when are all the others going to get it. Apple is got the best, and it’s only going to get better. They need to s–t or get off the pot.
“…Wasn’t Gorog one of the characters in ABC’s “Land of the Lost” back in the late 70’s?”
I loved that show! And yes, I believe that Gorog was the head sleestack…
“Oh Please” said “i just hate that they [Apple] think they are the alpha, and omega of everything. “
They don’t think they are the “alpha and omega” of everything – we do.
And as for all these also-rans like “Napster”, they don’t support Mac users so fsk ’em.
Rock on SJ!
Oh please –
Take your HANDS and slap yourself with them.
I buy that restricting your licensing to zero does put a finite wall around innovation – but iPod and iTunes are two PRODUCTS wihtin the industry…not their own industry. If Apple wanted to get monopolistic, they would simply not offer connectivity to the iPod dock. But instead, they offer accessory makers the opprotunity to partner with Apple, via the “Made for iPod” program. It is not unlike Microsoft offering MSDN certification. It’s not that you have to have it. But if you go through the program, your clients can feel that much better about your services. Same thing here.
The thing is “oh please”, is that I would rather wait for Apple to do it right, than to wade through all the junk that the other “innovators” are putting out. There’s nothing at all stopping other “innovaters” to come up with the next greatest thing (ie, downloadable movies and TV shows). It certainly seems to me that Apple is not holding back the industry. That the industry is stale, and trying to go about business the way they have been for 50 years. But when a company like Apple steps up and “thinks different” evereybody whines that they aren’t involved. If it wasn’t for Apple, well, we’d all be stuck with Microsoft, Napster, and the Dell DJ. I say let them have their monopoly, they friggin deserve it.
ONLY source?
There are literally millions of options for buying music for the iPod. They are called brick and mortar CD’ stores. They are called inernet stores.
The only one the iPod is a villain to is this guy’s lame azz company.
MW filled , as in Twinkies are cream filled
Probably 3/4ths (or more) of the music on my iPod is from CD’s or from Albums I own and I ripped into iTunes. I occasionally buy songs from iTunes and think it’s a great source for music. I would never choose to “rent” my music, if I like something, I will buy it to own it.
So far I’ve never been “bored” using iTunes, Apple is always adding more content & features to keep it fresh.
And to those groups or Record companies that don’t have their catalog(s) on iTunes, they’re missing sales like mad.
How is not allowing record companies to rase the price “dampening legal sales of digital tunes?”
BusinessWeek doesn’t explain that.
Why doesn’t BusinessWeek ask Chris Gorog, CEO of Napster to explain why he thinks “people are bored” when iPod sales are through the roof?
Come on BusinessWeek, you can do better than that!
All this crap is just like your car. Say you have a Chevy, should ford and all the others make parts to work with your Chevy, NO and that’s the same thing with Apple and the ipod.
iTMS should raise the bitrate to 160. Apart from that, I’m happy with it.
Never used the new Napster. Doesn’t work with my computer.
One would think that if one could legally buy songs from the big labels without any DRM restrictions, legal downloads would at least quadruple. DRM, in my view, means that legal downloads will be kept below its potential. No DRM will also mean that more people will share (because “beaming” songs from one device to the other will be made very easy). For the latter to be kept to a minimum, there needs to be an attitude change in an DRMless world. People will have to say, “Hey, buy your own songs,” when they are ask to share them.
I’m bored with the iPod FUD. The argument is that Apple should bow to the request to license Fairplay to all of the competitors that missed the boat. Apple took the risk, Apple reaps the reward. There are lots of other MP3 players that can use Napster, so if someone wants to buy Napster music, buy a Creative or a iRiver or a Samsung or a Sony, oops, strike that last one. ; )