Napster Goes Portable

Laura Rohde, IDG News Service

Napster launched a portable version of its digital music service in the U.S. and the U.K. this week, hoping to tempt users with a more tasty "all-you-can-eat" monthly subscription model.

Called Napster To Go, the company will charge users $15 in the U.S. and $29 in the U.K. per month, letting them download an unlimited number of songs onto compatible MP3 players as well as their PCs.

Napster users can fill and refill compatible MP3 players with their choice of tracks, but must plug, or dock, the device into their PC at least once every 30 days into order for Napster to verify they are still paying customers. If users stop paying their monthly subscription fee, the music will no longer play on the device.

By adding a portability element, Napster is looking to make its digital music service a more attractive alternative to the dominant player in the market: Apple Computer with its IPod device and ITunes online music service.

"It is a new business model for the consumption of music," says Adam Howorth, Napster's spokesperson in the U.K. "It is similar to how people rent air time to use their mobile phones or pay monthly fees to watch cable or satellite television. But it's a matter of getting people used to the concept."

Napster plans to spend $30 million on a marketing campaign promoting the benefits of digital music subscription services, which kicks off in the U.S. Sunday with a television commercial during the Super Bowl. The Napster marketing will also include promotions for compatible MP3 players from Creative Technology, Dell, and IRiver.

Can It Compare?

Apple has often stressed that its a la carte download service allows users to own their music like they do when they buy a CD. Napster will attempt to convince users that for the price of one CD per month, they'll have access to as much music as they want, and with a catalog of over 1 million songs, which gives them a lot more music to listen to, Howorth says.

As with Apple's ITunes, Napster also offers users the option of buying individual tracks for $0.99.

"In some ways, it's probably unfair to compare Napster and other subscription services with Apple ITunes as one is a programming experience and the other is a retail experience," says Mark Mulligan, a senior analyst with Jupiter Research in London. "One key difference is that Apple doesn't have to educate people, whereas that's something Napster and any subscription service will have to deal with."

Napster has made an important step by making its music portable with some MP3 players, Mulligan says. "This makes the Napster service more appealing for current users and may also be the tipping point for some of those who are seriously considering getting a digital music player."

Napster is the first subscription music service to take advantage of new copy-protection software from Microsoft that allow users to listen to digital music over devices as well as on their PCs.

Digital Rights Management

Last year, Microsoft updated its Digital Rights Management (DRM) technology by adding a hacker-resistant clock to portable music players for files encoded in Microsoft's proprietary Windows Media Audio format (WMA). Other companies such as RealNetworks are also planning to utilize the Microsoft software in an effort to take on the rival IPod.

Apple's FairPlay DRM system makes the IPod incompatible with music in the WMA format. "IPod users can't switch over to Napster or to anything using WMA," Mulligan says. "But it's a device driven market and IPod has been able to dominate the market despite being incompatible with anything else."

According to Mulligan, the market will have space for several players, all catering to slightly different users, much in the same way that radio stations target listeners with varying tastes.

"This is still a very small market and major companies like Amazon are waiting for the time being to see how it beds down," Mulligan says. "They don't see legal downloadable digital music as a missed opportunity because it's not a sizable enough market yet."

As Mulligan points it, the biggest competitor for Apple, Napster, or any other company remains free file sharing, despite the music industry's attempt to criminalize the practice. "File sharing, at the very least, is as big as it has been in the past, if not slightly more popular," he says. "It's just difficult to put a number on it because people are now less open about their use of file sharing programs with those trying to measure that market."