Napster To Go a Tough Sell? I Think Not.

By | February 7th, 2005 comments icon (5) Comments


napster to go logoThe debate between purchasing or renting music heats up. The Register posted an interesting article on basically why you would be stupid to consider subscribing to Napster’s new Napster To Go service, a service that lets you download all the music you want for only $15 a month.

Excerpt from “Why Napster will be a fully-integrated flop“

From where we sit, the math doesn’t break down terribly well in Napster’s favor.

Let’s take a look at consumer A. This consumer goes to Amazon.com and does a search for Creative – one of the Napster supported music device makers – and picks up a 20GB player for $249.99. Let’s assume he keeps the device for three years, paying Napster all the time. That’s $538 for the Napster service, bringing the three-year total to $788.19.

Consumer B types iPod into the Amazon.com search engine and finds a 20GB device for $299. Apple doesn’t offer a subscription service, so this customer has to buy songs at the 99 cent rate or at $9.99 per album. Subtracting the price of the iPod from the $788, consumer B would have $489 left over for music. That’s roughly worth 489 songs or 49 albums.

We posit that during this three-year period both Consumer A and Consumer B will actually end up with close to the same number of songs on their devices. Customers do not, as Napster suggests, pay $10,000 to fill their iPods with 10,000 songs just because the capacity is there. They take their existing music, CDs and MP3s, and put that onto the device first, then later add iTunes songs as they go along. A Napster customer would have a similar mix of old music and new downloads.

The big difference here is that after the three years are up, Consumer B has something to show for his investment. He still owns the music. If the Napster customer stops paying for the service, his music is all gone. He’s paying $179 per year to rent music. This isn’t high quality stuff either. It’s DRM (digital rights management)-laced, low bitrate slop.

The writer’s argument is somewhat sound, but it limits you to buying only 10 tracks a month. With an unrealistic consumtion limit like that, everyone would choose iTunes over Napster To Go. But the way to really look at monthly music rental services is to compare them to online DVD rental services like Netflix or Blockbuster Online. Yes I can buy one DVD every month from Best Buy (approx $18.00) to add to my collection, or I can subscribe to a Blockbuster Online for $15.99 and have access to an entire collection of DVDs at my whim (my current choice). To be honest, I don’t feel the least bit gipped that I don’t own hundreds of DVDs. In fact, I feel that I have enjoyed more content than I would ever have consumed by purchasing only one DVD a month. On top of that, the DVDs that I do purchase are ones that are worth seeing repeatedly.

My suggestion to anyone considering renting music is… if you’re comfortable renting DVDs online, you should have no trouble transitioning to renting music. But if you are the type of person who takes pride in amassing a collection of DVDs to throw on their entertainment rack, then renting music may be a tough sell.





Filed in: Content Providers

  • Crescent_Fresh

    Nice blurb about the Napster service…but I’d have to side with the news article in that it will be a flop.

    Your main point that renting DVD’s is the same as renting music is a bit of a stretch.

    The reason is that it is hard to compare music to DVD rentals [for me at least] since I listen to music over and over and tend to only watch a really outstanding movie 2 to 3 times in 2 years… So renting DVD’s makes sense since 99% of the time I will only watch the flick once I have no desire to actually own the DVD. On the other hand it’s very rare that I only listen to a album once and I’ll keep coming back to that album many times a year for years to come, so I would want to own that album…but I am truly a music fanatic and not a film fanatic so I may just be outside their target audience.

    I guess my main point is that music is something you listen to multiple times and there are only a few films that most people will watch over and over again…

  • melvin

    When it comes to music, I’d rather own then buy.

    Another factor is that people will rent a DVD when the don’t know if they will like the movie. After renting, they eventually buy.

    Music is different, you hear it on the radio and your hooked for life. In essence, you’ve already rented the song for free and you’re already at the buying stage.

    And there is always the pride of ownership factor. Not to mention that ipod has more style appeal than napster right now.

    That being said, I’m not ready to go buy an ipod either. The whole DRM issue still bothers me.

  • http://www.alexandergrundner.com Alexander Grundner

    My rebuttal would be that there is nothing stopping you from keeping your favorite tunes on your hard drive/portable player using music rental services (it’s more of a question of capacity and practicality). And if you really have to own a particular group of CDs… go out and buy them. The main point is that you can download music until your heart’s content, which in turn allows you to easily experiment with new music without wasting money on bad choices (hence the DVD rental reference).

    The problem most people have is separating the idea that renting music is a service like online DVD rentals, cable TV, cellular, etc. Online music providers have already shown that people are more than willing to pay $9.99 every month for Internet streaming radio (ie. Rhapsody, Napster Radio, etc), where they can select the music they want to hear on demand. So why not pay $15 for unlimited music downloads (so now you can take the music with you on the go) and Internet streaming radio which you get as part of the package?

  • peteo

    Another thing to compare this to is satellite radio.

    People are willing to pay $12 a month to listen to satellite radio stations that have music they like. But with napster you can listen to almost any song you want at any time.Like an on-demand music service and they should market it like that.

    Now sure satellite radio has some original content, but most of it is just music and maybe napster could branch out and get mp3′s of shows after they broadcast. Maybe even audible books…

    If they market this wrong, which I think they are right now it could fail.
    They should be marketing it like and on-demand or personal music station or something similar so then people will be ok paying $15 for the service and no expect to get any permanent songs

  • http://www.alexandergrundner.com Alexander Grundner

    peteo said: Another thing to compare this to is satellite radio.

    People are willing to pay $12 a month to listen to satellite radio stations that have music they like. But with napster you can listen to almost any song you want at any time.Like an on-demand music service and they should market it like that.

    Now sure satellite radio has some original content, but most of it is just music and maybe napster could branch out and get mp3′s of shows after they broadcast. Maybe even audible books…

    If they market this wrong, which I think they are right now it could fail.
    They should be marketing it like and on-demand or personal music station or something similar so then people will be ok paying $15 for the service and no expect to get any permanent songs

    That’s exactly my point… very well put! And I also like your satellite radio analogy even better :D