“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
You guys are missing the point here. Yes Apple jump started the market. Yes they are the market leader. But i do feel that they could open up the architecture (software and hardware) for 3rd party companies to tinkle and develop their own applications.
For one open up iTunes. You will find that MP4 is the de facto standard because of Apple great strides in the music business. Because of that, much companies will sooner than later ditch WMA in favor of the large iPod owners and tie-in their own applications. Let’s take the Cell phone and Cellular providers as an example: Verizon will much sooner adopt AAC than whatever they are using right now for tunes download if Fairplay was licensed. This type of adoption will spread Apple’s fortune much faster. Instead, Apple is closing off that market and driving the tunes download toward download to PC or Apple then transfer to phone. not exactly what the millions of users who have downloaded over-the-air tunes are a looking for.there are many other markets this example can be applied.
My point also is that Apple’s vision should not be the only one. May i remind you that Apple has also miss the boat on several other technology. they are not infallible. So why should we rely on them only?
Yes they have invested their own R&D. they are ripping the profits, blah blah blah… yes that is all fine and dandy. but as a consumer, i want more and faster.
@realist
I really don’t know what the innovation part is.
“any song can be imported into Itunes and imported to the iPod”
What was this “Gorog” guy thinking? iPod a villain? Geez. I agree with The Other Mark. This dude better get his facts straight.
Why don’t you whine about why I can’t use a Cannon lens on my Nikon. The threads are not open standards. That’s not fair
Photographer’s right. They’re different brands, and sometimes different brands’ products don’t work with one another.
Hey realist, why is this so complicated. Apple’s music store is not the only source to get music and put it onto the iPod and the ipod is not the only music player in existence.
Usually, when a company is just about ready to tank, they usually whine about the competition. The reason the iPod is successful has been well-stated by everyone–they build the best device, the best interface, the best store, and the best software–then they make it all work so seamlessly.
Companies have a right to defend their intellectual property. Apple doesn’t want to license its technology for any number of reasons: maintain profits, keep away garbage hardware, build a vision of where they want to take Apple–who knows.
Is Apple perfect? No way. For example, I would never buy another CD if I could buy Lossless songs from ITMS. Why they don’t go in that direction is beyond me, but it probably has something to do with bandwidth, etc.
I laugh at people with competing technologies. You should read the XM411 board, where people are constantly predicting the downfall of the iPod with the advent of some new XM device, or XM’s partnership with Napster. Of course XM broadcasts at around 70 kbps, so the sound is so filled with artifacts and compression that I actually only use XM to listen to the NHL, MLB, ESPN Radio, NPR, and the such. Musically, I take my iPod into my car.
Apple is the most innovative company around. Real and Napster know this simple fact, so since they cannot win on innovation, they whine. Customers are smarter than that. Usually.
It’s like complaining that your Xbox disc won’t work on your Playstation 2. THEY JUST DON’T GO TOGETHER!
AppleFan1,
I refer you to my earlier post about cell phone networks.
“Apple’s music store is not the only source to get music and put it onto the iPod and the ipod is not the only music player in existence.”
And that is most certainly not the only issue.
Yeah that is true, but I’m reffering to “Gorog’s” actual “iPods are villians!” statement. And if he wants to be able to have his Napster music being compatible with iTunes, then this is surely a step in the wrong direction.
Yes, I agree that Gorog’s an idiot.
If I were him, I’d be smacking myself in the face for giving that statement. I guarantee you he’s going to regret it.
http://macdailynews.com/index.php/weblog/comments/7862/
^
This will give you a good laugh.
Realist, then what is the issue? Is it becuase Apple is making money or you you don’t know how to burn a CD from a CD, purshase from TowerRecords or MSN and import it into itunes?
>> You have this device consumers love, but
>> they’re being restricted from buying anything
>> other than downloads from Apple. People are
>> bored with that.
hahahahahahahahahahahahahahahahahahahahaha
Name one person who is “bored” by this.
Here’s a sentence I don’t ever hear: “Wow, my iPod is so cool, but I sure wish I could buy music from walmart.com to play on it. I’m so bored not being able to do this.”
hahahahahahahahahahahahahahahahahahahahaha
Oh my, I’m so bored wih my brand new iPod nano because I can’t get songs off of Napster! I’m bored to death! *chokes* *dies*
Here little old Gorog is at Apple’s mercy, and what does he decide to do? He insults the iPod, calling it the “villian of the story”. My dog has more sense than him.
Confused,
Did you even read through the comments in this thread?
Realist:
I believe I understand your concern that everything music will be controled by the gatekeeper Apple if they don’t open up their “closed” system.
I think you might be in error with your logic.
If there is a better way to distribute music “any” company can come in and create it. If you think small companies can’t compete I think you should look at the industry as a whole for music: it really is only big companies that hold the content: Sony, Warner, etc. There aren’t any small companies in the bunch.
Your idea that if Apple opens up it’s system that the little guy will have a chance to get in on the action is Naive.
The only ones that would benefit are the big music companies and big hardware makers.
They are all being run by bean counters that think the only way to raise revenue is to charge more.
They look at the historic rate they received when CD were no lower than $25 and say we want to be there again. The problem is the boat has left.
If they think that raising prices and restricting the content with bulletproof DRM will force everyone to pay more since you can’t get it anywhere else – they will see sales drop like lead.
They are the true restrictors of the music business.
If there is a player that is the “must have” – consumers would buy it. Yes, people are downloading from iTms but it’s just another route of distribution and hasn’t replaced other forms. Consumers are still buying music in stores.
And you can feed your iPod from other music supply sources. The thought that you can’t is FUD being pushed by the music companies and the MS licencees of Play for Sure.
eh.. OF COURSE RECORD COMPANIES want to change the pricing scheme.. it’s their revenue source. pfft.
let’s make the most available songs on p2p MORE EXPENSIVE
friggin morons
you can use other players if you burn to CD first, and you can use some of them with iTunes as well to transfer music. Before I got the nano, i had an non-apple that worked fine for ripped mp3 music. its not a complete lock-out by iTunes.
What these companies don’t get or don’t want to admit is that apple’s solution worked because mac users were the early adopters and made it successful, whereas these other services often don’t even bother with mac users.
Sure Gorog considers Apple’s iPod a “villian.” It “stole” all of his potential customers and brought them to the iTunes Music Store instead.
Oh, almost forgot, fsck you, Gorog. Napster’s dead.
matrix3,
The music distribution method is certainly part of the issue but by no means the entire issue. I’m talking about software, hardware, accessories (ones that can’t play Apple’s DRM), and any other idea that’s out there that doesn’t stand a chance of being tried because it doesn’t have the ability to create a whole new system.
All your song are belong to us
You are (were) on the way to destruction.
Make your time.
Napster was dead long before iPods became the hot item.
But surely you’ve seen all the iPod compatible accesories that have been made. Why doesn’t Napster make an iPod compatible music player/browser that gets access to the Napster Music Store? Just an idea.