Napster CEO Gorog: Apple iPod is a ‘villain’

21 years ago

“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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