Napster's Gamble

In its Super Bowl commercial, Napster unveiled its new business strategy -- one it hopes will be profitable yet provide customers with the downloadable music they want.

For $15 per month, Napster To Go customers can download as much music as they want from Napster's 1-million-song catalog. Customers can listen to the music through the Napster client, or download them to an MP3 player.

It's all fun and games... until the customer lets his/her subscription lapse. Then they lose all their music. Oh, and about that MP3 player. Only models with built-in clocks will work with Napster; these will be aware of the owner's subscription status and will disable the music of any deadbeats. So if you're an iPod user and want to subscribe to Napster To Go, you're out of luck. You'll have to buy a compliant model like the iRiver H10 or the Creative Zen Micro.

Is subscribing to a music service really a viable business model? $15 per month (or $180 a year) may be too steep for many, especially young people who would make up the bulk of the service's customer base. Will customers appreciate having their music collections, in effect, held hostage? Or will the appeal of an "all you can eat" service outweigh any inconvenience and cost? Only time -- or the first hack of the timeout function -- will tell.

Source: ZDNet