In a transparent bid to blunt rumors that executives are considering selling or shutting down the company with layoffs imminent, Napster has issued a press release stating in part:
LOS ANGELES, Jan. 18 — Napster, the biggest brand in digital music, announced today that the number of premium paid subscribers enjoying its award-winning digital music subscription service has this week surpassed 500,000. In addition, there are over 50,000 college students subscribing to the service through Napster’s leading university program. The company also announced that over the last year its subscriber base has grown by over 100%.
“Doubling our subscribers over the last twelve months demonstrates the mass market potential of our music subscription model and the powerful appeal of Napster to music fans who want it all,” said Chris Gorog, chairman and CEO of Napster. “With a track record of robust growth, exciting new development in the pipeline and over $100 million on our balance sheet, we are extremely excited about the future of Napster.”
The company will provide additional details on its operations and performance during its third quarter earnings call, scheduled for February 8th, 2006.
Full press release here.
That, folks, is sad. “Sad” as in “weak,” not as the opposite of glad; we’ll shed no tears over Napster’s demise. Gorog must be tired, if he’s “extremely excited” about Napster’s future dirt nap (Dirt Napster?). Let’s play a fun game called Finish This Sentence: “Who knew there could be half a million __________ ?”
Advertisements:
• MacBook Pro. The first Mac notebook built upon Intel Core Duo with iLife ’06, Front Row and built-in iSight. Starting at $1999. Free shipping.
• iMac. Twice as amazing — Intel Core Duo, iLife ’06, Front Row media experience, Apple Remote, built-in iSight. Starting at $1299. Free shipping.
• iMac and MacBook Pro owners: Apple USB Modem. Easily connect to the Internet using dial-up service. $49.00.
• iPod Radio Remote. Listen to FM radio on your iPod and control everything with a convenient wired remote. Just $49.
• iPod. 15,000 songs. 25,000 photos. 150 hours of video. The new iPod. 30GB and 60GB models start at just $299. Free shipping.
• Connect iPod to your television set with the iPod AV Cable. Just $19.
Related articles: Report: Napster executives do the math, consider selling or shutting down, layoffs imminent – January 16, 2006
Napster CEO Gorog: Apple iPod is a ‘villain’ – December 12, 2005
More blood on Apple iPod’s Click Wheel: Thomson gives up on MP3 player, CE markets – December 12, 2005
More blood on Apple iPod’s Click Wheel: BenQ withdraws from MP3 player markets – November 28, 2005
More blood on Apple iPod’s Click Wheel: Olympus halts production of portable digital music players – November 09, 2005
Do the math: Napster posts $13.6 million second-quarter loss – November 02, 2005
More blood on Apple iPod’s Click Wheel: Rio is dead – August 26, 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
Apple’s iPod has blood on its Click Wheel: Virgin Electronics is dead – March 08, 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
They can spin it any way they like, the balance sheet don’t lie. They’re bleeding money like a stuck pig.
Who knew there could be half a million retards blowing $14.95 a month on crap?
Let’s see how much people love Napster and subscriptions in general once they fold up and all the accounts disappear.
Balance sheet translation:
Assets = Liabilities + Owners’ Equity
Therefore: Napster may have $100MM on their balance sheet, but if you were able to look closer in the numbers, how much is actual asset with real market value and how much is self generated, self inflated goodwill attached to the Napster name. Also, look at their debt/asset ratio, their debt coverage ratio, and their short term assets
If you don’t have enough cash to run a business, you will end up in the chop shop in no time at all!
Their “subscription model” is awesome. The more customers you have the bigger your loses. They just don’t teach that kind of out of the box thinking in business school. Just think, the more suckers, oooops I mean subscribers, they get the faster they’ll burn through the last of their 100 million.
I know! I know! I know the answer. It is idiot. I am I correct.
There’s a song I remember hearing back in the ’70’s (yes, I am that old) that reminds me of this guy. It was “White Punks On Dope.”
I’m sorry, but I had to say it.
The fact is, there is an apparent demand for subscription services. Just because Apple doesn’t offer one, that doesn’t mean it doesn’t exist.
Case in point, everyone here always talked about how there was obviously no demand for an FM radio option in an MP3 player. The only evidence to suggest this was that the iPod was selling just fine without one – pretty sketchy evidence. But alas, Apple did indeed come out with an option that satisfies the demand that many Apple fanatics refused to see.
Likewise, some people do actually want a subscription service. Just because it doesn’t appeal to you does not mean mean that there isn’t a use or demand for it.
Oh and additionally, no one that actually has a subscription service is actually losing anything if the subscription ends. Keep in mind what the subscription is actually paying for and you’ll understand, though I doubt many of you will.
“Who knew there could be half a million __________ ?”
suckers
While I’m sure Apple downplays the profitability of downloads, there wouldn’t be much to be made as an also-ran store not subsidized by iPod profits.
I hope they go out of business soon. It annoys me no end that my employers (Penn State) give these jerks loads of money each year in some pretend attempt to stop people downloading MP3s.
Unfortunately every single Penn State Student (or at least close to it, you’d certainly think so walking around campus) has an iPod, making Napster useless for them.
to realist:
Yes, a small and growing demand for subscriptions exist. Right now it does not appear to be sufficient in size to generate a profit. I’m not being critical of Napster for trying the subscription route simply because Apple doesn’t offer it. I’m critical of Napster because of the a-hole Gorog that keeps spouting off his mouth.
I actually don’t want Napster to close. I think Apple needs to have some “viable” alternatives in the marketplace to keep people from getting upset at their monopoly on the digital music business.
The people that subscribe will lose something if Napster closes. They’ve made an investment to date in this model under the assumption they can fill up their Dull DJ or Creative thing with music. Some may have bought those devices based on this model. They also likely have time involved in selecting and downloading music as well as organizing playlists and such. If Napster does indeed fold it won’t be just an “oh well” thing to them.
As far as the FM radio bit is concerned the argument was not that we all were discounting an interest in an FM tuner but that adding bells and whistles to a crappy MP3 player won’t allow it to compete with the iPod. The other point was that we liked the simplicity of the iPod and I personally wasn’t willing to accept a larger device to accommodate such a feature. I think it we go back through the records many here suggested FM as an accessory, not a built-in feature. Apple has done the right thing.
Pog,
Let me get this straight. You want a company to go out of business just because some Penn State employee made a bad decision? Shouldn’t your frustration be directed toward the actual source?
Macromancer
good call,
wait until that hits the news headlines.
500,000 people lose music rights after napster files chapter 11. After spending $179.40 for a one year subsciption, Jill lost all of the rights to play the 2,000 songs on her creative “ipod” wanna be.
take your sony bean and plant it in the backyard and grow an Ipod.
realist: You have a good point of course. However, to answer that, plenty of frustration has been vented at Penn State and its made no difference. Only Napster going out of business will change the business agreement now.
I agree with your point, its Penn State’s fault they got into this ridiculous situation.
That said, I just don’t like Napster, or any other “rent your music” services. I’d be very happy if that business model turned out to be untenable.
There may be value/interest in a subscription model, however it’s of no use if the company offering it can’t stay afloat with it, if the service provided with it is rubbish, if connecting hardware to the software is hard etc.
Apple’s solution may not be 100% ideal to each and every person but it does what it does and it does it simply and well. If and when digital downloads become the norm in conjunction with physical sales then chances are that iTunes will expand and grow to accomodate other sales methods, but for the time being it is doing everything right.
Napster may have a valid product idea but the execution is poor and that is why they’re failing.
iSteve,
The Dell DJ and Creative whatever you call it will still work whether Napster is in business or not. There has been and will be other subscription services that will no doubt work with those devices. So the only thing lost will be the time spent in selecting and downloading music, but even that is trivial because that’s probably done more often anyway because of the music availability that a subscription service offers.
.
.
.
Actually, if we were to go through the records here, we would in fact see a lot of posts saying how stupid FM is and how useless it is. I don’t think size was much of an issue since the amount of size it would have added is trivial. Simplicity also isn’t an issue, as evidenced by the fact that the iPod does in fact sport a radio interface that works just fine. It really isn’t a problem to have it as a built in feature that the use can use or ignore, much like photos, videos, games, address book, contacts, and other features that are found in the iPod that are not necessarily being used.
realist: First off, I’m not convinced there is much of a demand for subscription-based music services. 500,000 is a big number, but given the size of the market, it’s not as impressive as it sounds. Not bad, mind you, but nothing to get too excited about.
Secondly, what’s important to Apple is not whether there is a <b>demand</b> for subscription music, but whether Apple can make a <b>profit</b> by offering it. If Napster’s losses are any indication, the answer is no.
Apple makes smart, timely moves. They don’t just jump at every gust of wind. They determined they couldn’t build FM functionality into the iPod without making it chunkier and ruining part of its appeal. MP3 players with FM were not selling, so why bother adding FM to the iPod? By offering FM functionality in a remote, however, they target just that minority that actually care, while maintaining the iPod’s slim form factor that helped it become so popular.
I have no doubt that Apple will introduce a subscription version of iTunes the instant they feel they can make money off it.
Pog: “That said, I just don’t like Napster, or any other “rent your music” services. I’d be very happy if that business model turned out to be untenable.”
That attitude concerns me. Shouldn’t your happiness be based on what you personally do, not on what some company does that doesn’t affect your life? If you don’t like it, don’t use it. Simple as that.
realist: If you’re going to claim that adding an FM receiver to the inside of an iPod wouldn’t make it significantly larger, I think you need to back that up. My understanding is that every FM-capable player is significantly thicker and heavier than its iPod counterpart.
realist: If “music rental” becomes popular, then somewhere down the line Music will become “rental only” and we’ve lost yet another of our fair use rights. Personally I like to own my music, and would like to continue this. Failure of companies like Napster will hopefully mean that I will continue to be able to buy music that I own, and not have to pay a monthly fee to listen to.
Folks, you are such Apple apologists.
The demands for a subscription model DO EXIST, and they are gaining steam in the marketplace. The subscription model makes SENSE: I subscribe to DirecTV, NetFlix, yoga classes, the gym, my cable modem, bottled water delivery, and a whole bunch of other monthly services… why not subscribe to music?
Hell, I would like a subscription model myself, after spending $300 on iTunes downloads last year… for music that I RARELY listen to anymore!! I would LOVE to pay $10 per month to have unlimited access to ANY music out there that I want.
Just because Apple doesn’t offer it doesn’t mean that Apple is right. In fact, Apple’s arrogance almost ensures that they are 100% completely WRONG in this scenario.
Subscription services is where the future is at. And then all of you idiots will be changing your tune once Apple starts offering it.
Renting Music- sucks.
But now that there are new DVD formats on the horizon, I’m not willing to upgrade my current DVD collection.
So I think I’ll be renting my movies hence forth.
S
“Secondly, what’s important to Apple is not whether there is a demand for subscription music, but whether Apple can make a profit by offering it.
Hmmm, kinda like the profit margin on iTunes songs and videos.
“They determined they couldn’t build FM functionality into the iPod without making it chunkier and ruining part of its appeal.“
Unless you work at Apple, I’ll just going to assume that you really don’t know if that statement is true.
“but given the size of the market, it’s not as impressive as it sounds. Not bad, mind you, but nothing to get too excited about”
Hmmm, that’s what all the Apple apologists were saying about video playback in the iPod, that is, until Apple bundled video playback into the iPod.
Pog: “If “music rental” becomes popular, then somewhere down the line Music will become “rental only“
Well, that’s possible, but unlikely.
LordRobin,
Notice that the iPod remote is not much bigger than the old remote even though it now has a larger interface and FM radio.
Premature…
They have plenty of cash, just look at the balance sheet.
“Who knew there could be half a million… music players out there that weren’t iPods?”
deedubya
funny one about planting the bean. LOL!
Macbill “Hell, I would like a subscription model myself, after spending $300 on iTunes downloads last year… for music that I RARELY listen to anymore!! I would LOVE to pay $10 per month to have unlimited access to ANY music out there that I want.”
I would consider a rental at $10/month too. Napster is charging $14.95 and losing money! In order for the rental model to work, a company may have to charge $19.95, or $24.95, or $29.95/month just to break even. Would I pay that? NO.
morons.
They said they have about half a million subsriptions over a month ago when launchin Napster Germany. Didnt change that much since then, did it? They also said that music distributors will not be able to keep price levels stable if Apple fails to stand against the music labels. Napster Germany started without EMI artists because EMI wants more money…
We may very well see built-in FM in a 6th or 7th generation iPod. I won’t buy it because of that but like the video it will be a bonus.
Apple was not the first to do a MP3 player or a music store but they’ve been the best. They are likely sitting back and watching the demand for subscriptions which are increasing. If I had more cash to throw around and more time I might go for a subscription to help find music I want to purchase permanently. I can see the appeal to some.
Apple likely has a solution ready or in the works for a subscription model — many of us apologists have said that before. When and if they do a subscription they will likely do it in a manner that many of us will go, “oh wow that is so much better than other subscriptions” because that is what they do so well.
I want Napster to survive and at least break even. Seems unlikely though.
What y’all need to do is stop comparing Napster to iTunes. There is no comparison. iTunes can be compared to Wal*Mart or Tower or Best Buy or Barnes & Noble or other music retailers,
Napster can only be compared to XM or Sirius or other music rental businesses.
Gorog reminds me of Ken Lay and Enron. Remember their slogan, “Can’t stop the momentum!”? I’m sure the Titanic built up lots of momentum as it sank toward the bottom of the ocean.
Bill,
Ripping on the subscription model doesn’t make people here Apple apologists. Quite the contrary I think there are plenty of people that would like to see some sort of Apple sub model. I think where people laugh and scoff is that the competition places ALL of its business strategy in subscriptions and people like Napster and Real also tend to be vocal about how stupid THEY think the purchase model is. I think Apple has it right that most people want to own their music. But maybe some sort of middle ground exists.
I for one would love to see an iTunes subscription model where the monthly fee or a large portion of it goes towards monthly purchases, similar to the subscription model of eMusic.com. You pay 14 bucks to allow 1000 or so songs temporarily on your iPod (i mean how many new songs will you listen to each month) and 10 bucks of that you can designate to be permanent purchases. If you don’t designate them each month, then you lose them or at least maybe they roll them over for a one month grace period. That could be a killer best of both worlds model, as long as the economics of it could work out for iTunes.
I don’t see a future for Napster. Yes there are succesful renting models (cable TB, Netflix, and etc. I do believe however that music is a more intimate and personal item that the average consumer prefers to own. I know I do. Renting music is something that has never been done before and most people play music on iPods. Yes there may be a few people that would not mind renting but I don’t think there will be enough to keep Napster in biz for the long term. I personally would not invest any money on Napster.
50,000 singed up for university programs?
That’s like 5 schools…
Pog, I agree with you. I want to own my music. But do you really own music you purchase from iTMS? Thats a debatable question. I can own a CD. But I don’t think I really own the music I purchase on iTMS. Why? Simple. I can always sell the CD that I purchased. But I can’t sell the music I purchased from iTMS. To me thats a big difference. iTMS is a hybrid model. I have the rights to listen to the purchased music as long as I wish. But, I don’t have the ability to sell my rights to listen to that purchased music.
This is why we need to continue to support CD’s and not purchase music from online sites.
“We” must be a very small minority, eh, Gorog.
realist, you are right. It is kind of like the profit margin on iTunes songs and videos, as in there IS a profit margin, they may not make a lot per song after the label’s cut and other costs, but they are making money on every song and video sold. Even if it is only 4 pennies per song, multiply that by the millions and millions of songs and videos sold through iTunes, and it adds up pretty quick.
The problem with subscriptions is that the customer gets unlimited bandwith for ~$15 a month. For $15, Apple only has to deliver ~75 MB of data. Now think of how much music you could download in a month with a high-speed connection. Not to mention that the subscription+DRM model doesn’t work that well due to programs such as Audio Hijack.
Like any other service, subscriptions have a market, it just remains to be seen how big the market is and if it is possible to make a profit. So far it doesn’t look good.
“It really isn’t a problem to have it as a built in feature that the use can use or ignore, much like photos, videos, games, address book, contacts, and other features that are found in the iPod that are not necessarily being used.”
Actually, it is. See, all those other things you mentioned were software features, an FM tuner requires hardware, and is somewhat bulky. Not that it is huge, but the iPod’s don’t have much extra space inside, so they would have almost certainly had to be bigger to accommadate an FM tuner. Not to mention the impact on cost, battery life, outputting extra heat, etc.
Again, there is a market for FM tuners, but it is a niche market. I buy an iPod so I can be in control of my music, because it allows for vast customization on what I can listen to. No longer am I limited to playing one CD at a time or being brainwashed by ClearChannel, I can sort and play my music however I want. I’m sure there are a lot more like me, and we don’t want to pay more for a larger iPod with lower battery life. Make it an extra feature for the few people that want it.
And you were right, before Apple unveiled the new iPod everybody was saying playing video wasn’t an important feature for an iPod. What Apple unveiled that day that had everyone so excited was the fact that they would be selling TV shows through iTMS. That was a huge breakthrough, to have network shows available for download. That is why everyone made such a big fuss about Apple, not the fact that the iPod plays video.
That is why Apple easily maintains its lead in the digital media marketplace, it is the fact that they have the whole solution. A video player is useless without compelling content. That content is useless if you don’t have an easy way of organizing, viewing, and exporting it. The whole system (iTMS+iTunes+iPod) is greater than the sum of its parts.
realist, notice that the iPod remote does not have a hard drive which takes up most of the space in the case.
“…In addition, there are over 50,000 college students subscribing to the service through Napster’s leading university program…”
I believe the article would be more accurate in saying, “…In addition, there are over 50,000 college students FORCED to subscribe to the service…”
Retirement is always “extremely exciting!”
Let’s face facts, APPLE is the biggest brand in digital music. The only thing Napster is famous for is stealing from the music industry, and then their investors.
“subscription+DRM model doesn’t work that well due to programs such as Audio Hijack.”
-Well, the same can be said of iTunes DRM.
“they are making money on every song and video sold“
-Incidentally, yes they are making some money on the iTMS, though that was not the reason why they created it.
“all those other things you mentioned were software features“
-Yes, but people aren’t complaining that those features compromise the iPod’s simplicity, which I believe was one of the reasons why I mentioned those features. Additionally, some of those features, eg. video, require different processors which further require different prices and battery consumption levels. So even if you don’t use/want that feature, it still has an effect on the amount your paying for your iPod and the battery life that you’ll get out of it.
“Make it an extra feature for the few people that want it.“
-The same can be said of video and photos and color.
“What Apple unveiled that day that had everyone so excited was the fact that they would be selling TV shows through iTMS. That was a huge breakthrough, to have network shows available for download. That is why everyone made such a big fuss about Apple, not the fact that the iPod plays video.“
-True, the video store was a breakthrough, but I don’t agree that that is the reason why so many consumers made such a big fuss over it. After all, people wanted and expected a video playing iPod before anyone mentioned anything about a video store. The same is true of music. The iPod was a breakthrough before the iTMS opened up, and many people enjoy their iPods without buying a single song from the iTMS.
Regarding the profit margin for subscription services:
http://en.wikipedia.org/wiki/Loss_leader
Why do you think Firewire was yanked and went with only USB 2.0? They got a two-fer with the decision- less parts (cheaper) and less board space required. As a result they were able to make the iPod a little bit thinner. Following along this line, why would they want to integrate an FM tuner into the iPod adding parts/cost and taking up valuable board real estate? They wouldn’t. Their FM tuner add on is the smart way to deal with the issue- people who want or need a radio can buy it if they so choose. Adding the FM tuner interface is a software feature, not requiring the physical size of the iPod to change any. Apple’s version is an FM tuner done right.
Geesh, realist, what got your panties in wad today? A little feisty, eh?
what is both sad and weak is the number of pop ups this site blows at its users.
suck.
I would LOVE to pay $10 per month to have unlimited access to ANY music out there that I want.
Just because Apple doesn’t offer it doesn’t mean that Apple is right.
There’s only 10 reasons to be in business.
The first is to make a profit and the rest don’t count.
Napster’s 500,000 subscribers generate $7.5 million in revenue per month. Apple’s iTMS generates that much in two and a half days.
Apple is not about losing money to gain share, or provide youi with unlimited listening material. Granted they make very little on the iTMS, but they do make money, unlike Napster and the others.
If subscriptions were such a big deal, Napster would have more than 500,000 subscribers, and Apple’s iTMS would be struggling. Apple has over 10,000,000 customers at iTMS. You do the math, and keep in mind what the 10 reasons to be in business are.
His Steveness has said in an interview that M$ will end up making a player of their own. With a store of their own and a player of their own, do you think M$ will share with little old Napster? M$ will just bundle a subscription service with the campus licensing agreement for M$ software and Napster will be gone.
realist:
it’s pretty interesting how you rag on the “Apple apologists” concerning a la carte vs subscription services (Napster) while at the same time being somewhat of an “apologist” yourself. The subscription model is so obviously flawed, and the only reason that Napster is having any success with it is due to their relentless advertising and NOT to the qualities of the service. iTMS’s success is proof enough that the subscription model simply isn’t what the majority of the music buying public want. It’s a scheme that was dreamed up by the major record companies many years ago as a way to retain even more control over content, and has no realistic value for the end user (I’m not talking about DRM, either). That’s a fact.
I attend almost every major music industy convention in the world (Popkomm here in Germany, the MIDEM in France, various conferences in the USA), where the majors constantly discuss how they can maximize their (already over-inflated) profits. They’re unrealistically clinging to the hope that the subscription model will eventually work, but time and time again, they are proven wrong.
As to why so many of us want to see Napster take a dirt nap: It’s because Chris Gorog is a jerk, and not very business smart at that. Any CEO of a company who suggests that potential customers are “stupid” for using competing products (read: the iPod) deserves for his company to go down in flames. You don’t win potential new customers by insulting them.
“iTMS’s success is proof enough that the subscription model simply isn’t what the majority of the music buying public want.“
-This is neither a true statement nor is it a claim that I have made, much like OS X market share is proof that stability and ease of use is not what the computer buying public want.
“Any CEO of a company who suggests that potential customers are “stupid” for using competing products (read: the iPod) deserves for his company to go down in flames. You don’t win potential new customers by insulting them.“
-All too true. However, one would have to apply this to Apple and Jobs as well.
“I am Gorog. King of the Hill People.”
“”subscription+DRM model doesn’t work that well due to programs such as Audio Hijack.”
-Well, the same can be said of iTunes DRM.”
Not really. It is like burning a DVD you rent from Netflix vs. burning a DVD you bought from Wal-Mart. If you are renting the song, you have a limited license, and by keeping the music permanently you are breaking that license. If you have bought the rights to that song, you can do whatever you want with it as long as you don’t mess with the encryption (as per DMCA). Incidentally Audio Hijack doesn’t break encryption, so it is legal.
As for the iPod needing a more expensive chip to play video, sure that is true, but they also cut costs by removing firewire and I’m sure they were able to realize further efficiencies in manufacturing along with the constantly dropping prices on components. Apple has never raised the price to add a feature. The video playing is a free feature as far as anyone is concerned. The software is a moot point, the only cost there is a few programmers make a few programs, as opposed to hardware that has to be put into every iPod, even a $1 FM tuner would have cost Apple $14 million over the last quarter.
edit: you can do whatever you want as long as you don’t mess with the encryption or distribute it.
‘”iTMS’s success is proof enough that the subscription model simply isn’t what the majority of the music buying public want.”
-This is neither a true statement nor is it a claim that I have made, much like OS X market share is proof that stability and ease of use is not what the computer buying public want.’
Of course it’s a true statement. The numbers speak for themselves. Making the iTMS : Napster / Windows : OSX situation is also flawed logic IMO, since you (maybe inadvertantly) imply that Napster and OSX (small marketshare) compared to the iTMS and Windows (dominant players) are similar. The big difference is of course that OSX is superior to Windows, whereas Napster is not superior to the iTMS. The iTMS is one of those rare cases where the better product dominates the market.
‘”Any CEO of a company who suggests that potential customers are “stupid” for using competing products (read: the iPod) deserves for his company to go down in flames. You don’t win potential new customers by insulting them.”
-All too true. However, one would have to apply this to Apple and Jobs as well.’
In what way? Jobs never PUBLICLY insulted his potential customers. Gorog did. He literally called iPod users “stupid”. If I were ever considering going to Napster as an iPod user, that statement would have pissed me off. Lost sale.
why would you believe someone whose name reads like something from a bad Sci-Fi movie? i mean, c’mon… “Gorog”?
“Gorog sez: ‘Napster… goooood!’ We must believe Gorog!”
gimme a break!! if you actually bought into that crap you deserve what happens to you.
Secret Bio:
Gorog is known in Tijuana as Senor Palindroma.
He spars with mentally challenged livestock for tequila money.
The senoritas call him “Sir Little Download.”
He has a huge tattoo on his left butt cheek of a cat with headphones smoking a joint.
We gotta party with this cowboy.
I think anyone willing to pay for noticeably inferior 128kb music that isn’t really portable is getting a bad deal whether its from Apple or anyone else.
On the rare occassion when I buy an overpriced CD, at least I know it’ll play on any CD player anywhere and has been that way since the release of the very first CD and I can rip it as well.
The music companies wouldn’t have a problem if they priced their CD’s appropriately and frankly $16-20 CDN for a CD just isn’t worth it.
Price them at $10-12 and I’d buy a lot more of them. Greed, not pirating is what’s killing the music labels. Before the days of downloading, I can count on one hand the number of CDs I purchased in any three year period.
Add DRM to the mix and the whole think looks like a losing proposition from a consumer point of view.
TommyBoy: the comparison is flawed. With Serius and cable tv (both of which I subscribe to) I can still record the music/movies (albeit illegally). I find this useful for finding new music etc. Not so with Napster. And I don’t have time to go searching for crappy music when I’ve never heard it before. Let Napster set themselves up as a radio type service (i.e. push based service) and they might have more luck. Until then Serius rules, Napster sucks.
Realist: When did Jobs or Apple as an entity ever call the competition’s customers stupid? I can’t find it anywhere. That’s the difference. One CEO says it. The other doesn’t.
I think both models have their place. But since when did hemorrhaging money make your business model successful? If you sell/rent something at a loss you only lose more when you sell/rent more of that item? What are they teaching you people?
“also cut costs by removing firewire and I’m sure they were able to realize further efficiencies in manufacturing along with the constantly dropping prices on components. Apple has never raised the price to add a feature. The video playing is a free feature as far as anyone is concerned.“
-You could use the same argument for FM radio.
“Of course it’s a true statement. The numbers speak for themselves.“
-You obviously don’t understand the point I was making. In fact, your entire post contains too many flaws to enumerate. Suffice it to say, consensus (numbers) do not make a statement true.
“Jobs never PUBLICLY insulted his potential customers.“
-Sure he does. He’s constantly insulting non-Apple users through advertisements and implications.
Who knew there could be half a million songs sold every 4 hours on the iTunes Music Store!?
“There’s a song I remember hearing back in the ’70’s (yes, I am that old) that reminds me of this guy. It was “White Punks On Dope.”
I’m sorry, but I had to say it.”
Long live The Tubes!! (They’re still touring…saw them a few years ago!)
“The only thing Napster is famous for is stealing from the music industry, and then their investors.”
I sold when it was around $7 (actually just before the name change)
” width=”19″ height=”19″ alt=”grin” style=”border:0;” />
And then bought more Apple when it was at $30.
Pog-
I’d like to test this “ownership” idea of yours. Why don’t you go make a bunch of copies of this music you “own”, and then sell it on the open market. Just to see who really “owns” that music of yours. I think you’ll find that we’re all just renting the music. Well, when you get out of jail for selling the music you “own” that is.
Everyone else saying the subscription model doesn’t work because Napster is losing money, can’t truly judge that. With 83% of the player market “locked out” of the subscription model there’s no way to really compare it’s potential. I can’t subscribe because Apple doesn’t offer that, and my two iPods don’t support another download service. I love my pods and am not willing to get another device (except another pod ). But I certainly would consider it if Apple offered it.
Why does it have to be either or? Why can’t I subscribe and download 10,000 songs a month and enjoy that while I want, and then buy the ones I really want to keep around? Subscription coupled with the ability to still purchase isn’t a bad idea at all. Why would it be? If you think subscription is stupid then just buy the 10,000 songs and move along, no harm no foul.
Apple-heads suck! They can’t think on their own!
Napster is better than iTMS! Windows XP rocks compared to OS X!
Why is there such a black-and-white, this or that mentality about this? There are markets for both purchase and subscription-based models. I for one would love a subscription service to listen to music I may not want to keep forever, but might like at that moment. The songs I want to keep forever though, as part of my collection, I want to be able to buy, and not worry twelve months down the road if I have to ask permission again to listen to it or hunt it down again through a different vendor.
The Napster scenario is flawed because of this. When they die, I have to find some other vendor to listen to my favorite music, when it’s much either to pick up my iPod, CD, iTunes, whatever and click on it, knowing it will always be there.
And the DirecTV, bottled water, NetFLix analogy is apples and oranges. Music is a very personal thing for people. We want to keep the best of it, and have it ready for us when we need it– when we’re happy, when we’re sad, when we’re pissed. I listen to the songs that complement my moods, and they help me get through some pretty rough days. DirecTV et. al. does not have that kind of impact.
The FM debate is also lame. I have my iPod to GET AWAY from FM. I have it hooked up to my car stereo because I’m sick of hearing Dave Matthews, Sublime, and Bob Marley over and over and over again. Screw FM. Talk about an outdated model! I’m glad my iPod has no FM functionality.
There’s room for a subscription service out there, but it has to be tied in to some sort of easy-to-use purchase model that doesn’t screw me with DRM. Hopefully Apple will implement it, or some other company will do a better job of it. Right now, the Napster model isn’t the right one, and that’s why I personally could care less if Napster lives or dies.
FM radio is on the way out anyway, with digital radio coming in in 2007 (I think that’s the year).
Apple will add a subscription model when enough people ask for it. Apple will almost certainly have a side-by-side purchase and subscription model. They don’t have one now because most people who want a subscription model won’t pay enough money for one or are too afraid that their service will go under that they won’t pony up and pay for it.
Look at the subscription models: Blockbuster tried to undercut NetFlix, only to be forced to raise their prices to NetFlix’s prices because they were losing money at $15 for 3 DVDs/mo. I suspect that Apple can’t make money at $15/mo. for a subscription, so they don’t even try and give us the best music store of any service.
There are different needs for different people…I have hundreds of vinyl albums and I have recorded some with my Mac. I also have hundreds of CD’s, as many people do, and loaded them as well. The subscription model is not usefull for me. But, a teenager who does not have the cash to set up a huge CD library, subscription works for them. Not that iTMS should offer the service. Obviously the market has spoken and so far people like to own their own music. The only question is whether the subscription companies can sustain a less popular model.
Re: Apple insulting their potential customers…
No they don’t. Aple ads inspire everyone, even if inspire them only to use Apple products.
They may insult their competition, though the ones they have insulted are so large, it’s hardly accepted as an insult. (Dell, M$)
HOWEVER…
M$ insults their customers: Look at the dinosaur ads! Can you imagine the mindset here: we want our customers to upgrade. Let’s influence their mind by making FUN of the fact that they don’t upgrade their system (which they’ve probably avoided because of very reasonable situations) by calling these people dinosaurs. THEIR CUSTOMERS! DINOSAURS!
Not to mention Dell offering computers for a few hundred $$, that almost instantly require more than 200% of this cost JUST TO MAKE THEM A VIABLE SYSTEM FOR ANY BASIC USER – EVEN YOUR GRANDMA WHO JUST USES IT FOR EMAIL.
What a sad situation – but what an awesome company Apple is.
Who knew there could be half a million people banging Gorog’s mom?
Apple should buy the rights to the napster name and rename iTunes to Napster. iPod + Napster