“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
Or why not make a deal with Apple instead of insulting them, so that the Napster and iTunes stores become somehow combined. Both companies would benefit, Apple having more songs for users, and Napster having its songs on a more popular music player.
Realist,
I read the thread. Unless you, yourself have a company that is ready to compete with iTMS or iTunes your comments make no sense at all. If you really want to sell to iPod users sell them DRM free AAC’s or MP3’s at a higher resolution. You wouldn’t need software from Apple and even at $1.50 a tune I would buy.
iPod owners have many great choices right now. First they rip their CD’s. Then they load their iPods and play their music. If they have a free MP3 collection from their past, good old pirate days they also load them on their iPods. There are many legal MP3 sources as well, both free and for payment. Then there are DRM’ed tunes from many other stores that can be burned to CD and reripped to iTunes.
What more is needed? What is missing? Movies? TV? Audio and Video Podcasts? iTMS has them. Programs to rip your DVD’s and your PVR’ed TV into iPod compatible files? Good ones are available for Mac and Windows.
Realist, tell us, what could you offer?
Subscriptions? Get real! Tell us about something we want.
Big Al says it all. So now what is the issue?
Here’s one—Why can’t I put a standard DVD into my PSP?
Gorog: “Mommy, mommy, those other boys over there don’t want to play with me. Go tell those ‘villians’ that they have to.”
sounds about right…
I find it surreal that a CEO of a company (napster) that was founded on “sharing” music and depriving musicians all over the world of their legitimate royalties would cast dispersions and call Apple “villains” for creating a legal market that allowed those same musicians to be treated fairly.
How anyone in their right mind can argue that Apple is in anyway obligated, or required to open up their technology for the benefit of the other companies that they are competing with is not only naive, it’s simply childish. That’s not the way the real world works.
In the early 20th century Ford didn’t owe GM, or Oldsmobile the blueprints to the model “T” to help them compete, or to help them innovate. They didn’t give the founders of the other companies factory tours to help them understand how to make a product cheaper, with better quality, in a larger quanity. Hunger for market share drove them to innovate, and they did.
The American Auto manufactures didn’t owe the Japanese Auto manufactures anything in the early 50’s and 60’s to help them innovate or to gain market share. Hunger for $$ did that.
Companies that want to survive must innovate and create. The key to business success is figuring out where the market is going, get there first with the best product and service, charge a fair price, and take care of your customer.
Napster is a dead duck, they won’t die of legal battles, they’ll die because they don’t innovate, they just steal.
Let’s say you have a great idea for a music distribution method. Now you need the content, so you go to the music labels and they say they love the idea, as long as you protect the music with some type of DRM. So now you have three choices; use Apple’s, MS’s, or create your own. Well, you don’t have the resources to create your own. Even if you did, it wouldn’t work on the majority of players out there. You definitely don’t want to use MS’ format, so you go to Apple, who in turn tell you to go screw off. You manage to find a way to seamlessly sync with the iPod, but you remember what happened with Harmony and decide that that option won’t work. Well, you know full well that a distribution method without good software and a good device isn’t going to compete with Apple, so you decide to try to sell your idea to Apple. They ask you what’s so great about your idea, and then after getting enough of the details, they tell you that your idea doesn’t match the direction that Apple want to take as a company. With no hope of being able to create a marketable product, you decide to just give up and try something else. A year later you see your idea incorporated into the next version if iTunes.
APPLE IS A VILLIAN?
What about allowing hundreds of thousands, if not millions of people to download subscription based music and simply rip off the sound card to keep it forever without paying the artists?
<b>Who’s the fscking villian?</a>
FSCK U CRAPSTER
You know what, it really gets to me when 1 cellular company has more customers because they have better phones. It’s not fair when Cingular has better phone than Verizon. You should be able to use any phone with any service by some standard.
Sometimes you have to admit you dont have anything in your cards and walk away from the table or even before you sit down at the table take into account the players. Personally Id rather find a way to be Apples partner rather than try to compete.
Alright, it looks like it’s beat on “Oh Please” day, so here goes… I’ll try to use a “logic bat”.
From: Oh please.
“APPLE IS HOLDING BACK THE INDUSTRY. for the simple reason that they control everything and limit innovations.”
• Apple isn’t in control. The 30 million & counting people who have bought an iPod are. I don’t own one. I’ve thought about it, and the new iPod with video capabilities is intriguing, but I’ll wait ’til they have a bigger screen, and more “practical uses” than just music & video. And, granted, Apple hasn’t released iTunes for any of the gazillion-odd breeds of Unix (other than MacOS X itself), but otherwise they’re not forcing their will on anybody.
“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… Is that a way to treat your partners that will in the long run strenghten your products? i don’t buy it.”
• Licensing the iPod and iTunes, and “opening up” the iTMS is no different than if Apple were to start licensing MacOS X on x86. You can’t limit it to only the “best of breed” manufacturers, because tiny little “Backwaterville Unstable Computers & Lawnmowers, Inc.” will sue Apple because they were denied a license to make trendy flourescent green, but otherwise-beige, boxes held together by duct tape and paper clips…
“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…”
• The internet is still too slow for movie downloads – I know somebody who has used P2P sites for Movies, and it took 5-6 hours for one movie, sometimes he’d let it chew on it all night. It’s getting better, but unless all spammers, virus-builders and porn sites dropped off the face of the earth tomorrow, the Net just “isn’t up to speed” yet. And that’s not Apple’s fault. And Apple’s interface is part of MacOS X – you can’t have one without the other (see previous comment above regarding licensing).
“All Apple products are not the best. and they should not be the only ones. Open market encourages innovations. Not MONOPOLIES.”
• I would think that the definition of an “open market” is one in which consumers have the right to choose what products they wish to buy & use. And 30 million plus have chosen iPod + iTunes + iTMS over the lame innovations and knockoffs of the likes of Creative, iRiver, Thomson, Real, Napster, Microsoft, et al. And, similar to drug dependency, one of the last stages before acceptance & recovery is denial & anger – Napster & Real taking potshots at Apple, Creative trying to bluff its way with a lameass patent that never should have been granted (wasn’t a heirarchical menu system part of MacOS 7?).
• Now, a monopoly is wherein one company comes to dominate a vital industry by coercing manufacturers to use only their technology/product, while at the same time using its legalistic and/or financial might to bury and/or cowtow any potential innovators and/or competitors… That’s what they call Antitrust, and that’s why Standard Oil (J. Paul Getty)was busted up, and that’s why Ma Bell was busted up into the RBOCs (Regional Bell Operating Cos. and AT&T). That’s why Microsoft should have been divided into 3 OS companies, 1 applications company, and 1 internet services company…
•• Finally, I went to the BusinessWeek article, and left the following comment:
Big record companies control about 70% of the market – many “independent labels” are not. Artist’ royalties are (approx.) 12.5% on a “physical” CD sale, but only 6.5-8% on a digital download, where record companies have zero costs for the CD, jewel case liners, shipping, etc. Yet they take about 65% of that 99 cents Apple charges for each song…
Most new CDs are on sale the first week, then jump up to about 20 bucks (HIGHER if you shop at Richard Branson’s pricey Virgin Megastores).
When CDs first appeared in the 80s, didn’t music execs brag they would be cheaper than cassettes? And music-quality hasn’t improved (1 good song on a 20 buck CD). So who’s greedy and driving people to illegal downloads?
And don’t get me started on “inside the box” Real/Napster, Creative, et al… They’ve clearly shown they can’t design a “must have” product, so I’m glad Apple doesn’t need to share with them.
Nobody forces a person to buy an iPod or use the iTMS. People made a choice…
• So, “Oh, Please”, sorry about the “logic bat”, and take 2 aspirin…
HELP!…
I was just mugged. My assailant was white and about 4 inches high, with a face that lit up. He had a large round wheel with a button in the center positioned on his abdomen. He had a thin white wire coming out of the top of his head and was singing Manic Depression by Jimi Hendrix.
Still I donn’t get it. Buy a Creative labs music player and download from another source or buy a SOny music music player and download from another source. Don’t like Apple products and the way they do business, dont buy it. I’ve see a homeless person using a music player other than an iPod and doesn’t whine like Apple owns everyone something.
What’s an iPod, I still use a boombox
My iPod just held a gun to my head and told me to download “highway to hell” from the iTMS.
Now that’s gangster.
Napster System Requirements
PC only, <u>Windows XP/2000</u>, <u>Microsoft Internet Explorer 5.1</u> or higher, <u>Windows Media Player 7.1</u> or higher, Internet connectivity
Note: Windows XP and Windows Media Player 10 are required to use the Napster To Go™ service.
Terms and Conditions
<u>Importing Tracks</u>. … The Client currently only supports MP3 and Windows Media files.
<u>Loss of Rights by Napster</u>. Napster may at any time lose the right to make certain Tracks and/or Materials available. In such event, you will no longer be able to obtain [play] these Tracks….
Currently, the Service is only available to residents of the United States.
<i>If you wish to burn Downloads to CDs or transfer them to compatible portable devices … you will need to pay for them as Purchased Tracks…. In order to play any Download after the end of a Subscription Month … you must log on to the Service so that Napster can renew your rights for those Tracks…. Napster automatically renews your rights to all of your Downloads at the beginning of each Subscription Month (as defined below) so long as your subscription remains current.</i>
So … pay extra to download, cancel the service eventually, or move anywhere other than US, Canadam UK, Germany and you would lose your rights to the track. Unless you’ve burned it.
ABOUT NAPSTER: Napster is the most recognized brand in online music.
INVESTOR RELATIONS: <u>Napster</u>, the biggest brand in digital music, is a subscription service….
The numbers per month during 3-mo. period to Sep’05 (MM=Millions)
+7.8 MM Net Revenues
-6.1 MM Cost of Goods Sold
– – – – – – – – – – – – – – – – – – – – – –
+1.7 MM Gross Margin
-1.0 MM R&D
-3.5 MM Sales & Mktg
-1.6 MM General & Admin
– – – – – – – – – – – – – – – – – – – – – –
-4.4 MM Loss
Sep’05 Cash & Similar $127.6 MM at a 4.4 MM burn rate equates to over two years’ lifespan. Stock has halved for the year.
All you people out there complaining about iPods and iTunes, I have a challenge for you: Try creating your own mp3 player and music player/browser that surpasses Apple’s. Now as you can see, you shouldn’t be complaining, and instead be content that someone made these things at all, so that you don’t need to.
Windows only?
Why is Gorog even talking about Apple then?
Geesh, I’ve owned an iPod for 4 years and never complained about problems related to importing music. Now I read all these big shots not involved with Apple success complaning and whinning and all the PC fan boys following them waging their tails. It’s pathetic.
Remember the scene from Dr Strangelove where Slim Pickins rides the bomb down to its target? Gorag is riding the bomb, and the bomb is Napster.
“people who buy iPods are stupid”
Gorog has insulted me, my mother, my sister, my best friend, several people from my school, and many others from my swim team. What an a**.
But you got to give the guy credit. He was the one who started the whole free music download craze.
To Warner, Sony, Universal, etc. Nobody is stopping you from designing your own music player, making it, selling it, running your own DRM, encoding your own music, & distributing it on your bandwidth. Correct? Yes.
What are you whining about? By the end of the month Apple should have an installed base of well over 40 million iPods and have sold around 1 Billion songs for you. Apple has done the hard work and is taking the smallest cut. You have done the least and are getting the largest cut.
I could say you (RIAA members) are greedy, but that wouldn’t be nice. True, but not nice.
Idiots, imbeciles, stupid mutha’s. So if I’m the next product on the market that is innovative and successful I’m going to have a bunch of sharks whining that they can’t get to me to pull the meat from my bones? All because I build a cage to protect me from them and allow me to lock my own environement in which I like to work. I can still let in other people that I like (import my own cd’s/add mp3’s etc…) but I don’t have to let in a Maco or a Great White that is going to gut me and leave a dried out shell for the rest of the scavengers to pick over.
That’s alright I’ll leave my door shut, they are welcome to try the cages on the other people’s boats.
If there’s a definition of “sell-out” Napster fits it.
What part is locked out? I can burn music from iTMS onto a CD or I can burn music into a CD from MSN for example and import it unto iTunes to my iPOD. I can buy music from a music store and import the CD to an iPod or another music play. I still don’t get it.