WHat do you all think of this? Would it beat the iPod??? Pros, Cons???
Microsoft plan lets subscribers download away Napster's entire catalog of songs could be had for $180 a year
Jefferson Graham, 12.21.04, 11:36 AM ET
USA TODAY
LOS ANGELES -- Chris Gorog is convinced people won't continue to pay $1 a song for online music.
That is despite Apple's record string of recent achievements, including 200 million songs sold at its iTunes Music Store, and nearly 4 million iPod digital music players moved into consumers' homes this year.
Gorog runs Apple rival Napster, which offers digital downloads and a music subscription deal. Consumers get unlimited access to listen to 700,000 songs for $9.95 monthly.
The hitch is that to move songs onto a portable digital device or to a CD costs extra: $1 a song. That's one of the reasons digital music fans have not taken to the subscription model -- also offered by Real Networks' Rhapsody -- in a big way.
But Gorog thinks that will change next year. And he has other heavyweights such as Yahoo and Microsoft in his corner.
Microsoft earlier this year developed a new copyright protection plan that allows for the transfer of subscription songs to portable players. For $5 more a month, consumers can transfer Napster's entire catalog to their device -- and listen as often as they'd like -- as long as they subscribe.
With the top-of-the-line iPod, ''You can fit 10,000 songs on it,'' Gorog says. But ''to do that would cost you $10,000 if you bought the songs from Apple. With our plan, customers can get 10,000 songs on their device for $180 a year. It's an enormous value.''
The caveat is that Microsoft's copyright plan doesn't work with iPods, or virtually any player now on the market.
Only a handful of devices, including MP3 players from iRiver and Gateway, work with the subscription plan offered by Napster and by FYE.com. But in January, devices from Virgin, Creative Technology and Rio will offer software upgrades to make their most recent models compatible with Microsoft's technology. Many more devices also are expected to follow next year.
''We're really happy with the way the momentum is building,'' says Mike Coleman, a Microsoft product manager.
That may be news to consumers. Colorful billboards and ads for the iPod and iTunes are on seemingly every street corner, and Apple is having a record year.
Beyond a new Web site -- www.playsforsure.com -- there's very little mention of Microsoft's innovation, and hardly a ripple in advertisements for big-box retailers, which have devoted most shelf space to the iPod.
''One of the reasons Apple has such a huge advantage right now is their aggressive marketing. It's really paid off,'' says Paul Resnikoff, the editor of newsletter Digital Music News. ''If Microsoft is serious about their initiative taking off next year, they've got to get the word out.''
Apple has a 65% share of digital music player sales, according to NPD Group. While rivals have been aggressively launching rival units with slightly lower prices and more features, most critics say iPods are still the easiest to use and the better value.
At a recent industry conference, Music 2.0, panelists were eager to shoot a few holes through Apple's recent success. Apple's Chris Bell dismissed industry speculation about slowing iTunes sales, and showed monthly download statistics that had 10.8 million songs sold in May, increasing to 16 million in September.
After the presentation, rivals weren't appeased. They argued that in the long run, for-sale downloads were doomed.
''Selling 99-cent singles isn't working as a business model for us or for consumers,'' says Dave Goldberg, who runs Yahoo's music division. It includes Musicmatch, which offers both downloads and subscriptions.
''We sell hundreds of downloads,'' Goldberg says. ''But we don't make money on them. Subscriptions is a much better business for us.''
Music labels charge a wholesale rate of about 65 cents a song, and most services offer them for 99 cents each, leaving a razor-thin profit that also has to factor in credit card fees, marketing and overhead. The services favor subscriptions because they generate more profit and bring in steady revenue each month. Resnikoff says services profit about $4 per subscriber on the $9.95 subscriptions.
While Apple has a commanding share of the digital download market -- and sold 100 million songs from July to December -- rivals are doing well with subscriptions.
RealNetworks says it has 650,000 subscribers to its music services, which include Rhapsody. America Online says 350,000 subscribe to its MusicNet. Napster, which is splitting off from software company Roxio, has been shy about reporting subscriber numbers. It says 73% of revenue comes from subscriptions.
Gorog, CEO of both Napster and Roxio, says he agreed to sell Roxio in August to Sonic Solutions for $80 million partly because of his belief that subscriptions are the future. ''We wanted to concentrate 100%'' on Napster. The sale was finalized Monday.
The Napster portable subscription is available now in a test mode. In the first quarter, Napster will begin to loudly alert customers to ''Napster to Go,'' Gorog says.
To make it work now, users must work from within Windows Media Player. When it becomes part of Napster, it will work from within the Napster software.
''This is our way to explain to consumers how radically better the subscription model is,'' Gorog says. ''We think prerecorded CDs will be with us for some time, but 10 years from now, this will be the primary way people consume music.''
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Microsoft plan lets subscribers download away Napster's entire catalog of songs could be had for $180 a year
Jefferson Graham, 12.21.04, 11:36 AM ET
USA TODAY
LOS ANGELES -- Chris Gorog is convinced people won't continue to pay $1 a song for online music.
That is despite Apple's record string of recent achievements, including 200 million songs sold at its iTunes Music Store, and nearly 4 million iPod digital music players moved into consumers' homes this year.
Gorog runs Apple rival Napster, which offers digital downloads and a music subscription deal. Consumers get unlimited access to listen to 700,000 songs for $9.95 monthly.
The hitch is that to move songs onto a portable digital device or to a CD costs extra: $1 a song. That's one of the reasons digital music fans have not taken to the subscription model -- also offered by Real Networks' Rhapsody -- in a big way.
But Gorog thinks that will change next year. And he has other heavyweights such as Yahoo and Microsoft in his corner.
Microsoft earlier this year developed a new copyright protection plan that allows for the transfer of subscription songs to portable players. For $5 more a month, consumers can transfer Napster's entire catalog to their device -- and listen as often as they'd like -- as long as they subscribe.
With the top-of-the-line iPod, ''You can fit 10,000 songs on it,'' Gorog says. But ''to do that would cost you $10,000 if you bought the songs from Apple. With our plan, customers can get 10,000 songs on their device for $180 a year. It's an enormous value.''
The caveat is that Microsoft's copyright plan doesn't work with iPods, or virtually any player now on the market.
Only a handful of devices, including MP3 players from iRiver and Gateway, work with the subscription plan offered by Napster and by FYE.com. But in January, devices from Virgin, Creative Technology and Rio will offer software upgrades to make their most recent models compatible with Microsoft's technology. Many more devices also are expected to follow next year.
''We're really happy with the way the momentum is building,'' says Mike Coleman, a Microsoft product manager.
That may be news to consumers. Colorful billboards and ads for the iPod and iTunes are on seemingly every street corner, and Apple is having a record year.
Beyond a new Web site -- www.playsforsure.com -- there's very little mention of Microsoft's innovation, and hardly a ripple in advertisements for big-box retailers, which have devoted most shelf space to the iPod.
''One of the reasons Apple has such a huge advantage right now is their aggressive marketing. It's really paid off,'' says Paul Resnikoff, the editor of newsletter Digital Music News. ''If Microsoft is serious about their initiative taking off next year, they've got to get the word out.''
Apple has a 65% share of digital music player sales, according to NPD Group. While rivals have been aggressively launching rival units with slightly lower prices and more features, most critics say iPods are still the easiest to use and the better value.
At a recent industry conference, Music 2.0, panelists were eager to shoot a few holes through Apple's recent success. Apple's Chris Bell dismissed industry speculation about slowing iTunes sales, and showed monthly download statistics that had 10.8 million songs sold in May, increasing to 16 million in September.
After the presentation, rivals weren't appeased. They argued that in the long run, for-sale downloads were doomed.
''Selling 99-cent singles isn't working as a business model for us or for consumers,'' says Dave Goldberg, who runs Yahoo's music division. It includes Musicmatch, which offers both downloads and subscriptions.
''We sell hundreds of downloads,'' Goldberg says. ''But we don't make money on them. Subscriptions is a much better business for us.''
Music labels charge a wholesale rate of about 65 cents a song, and most services offer them for 99 cents each, leaving a razor-thin profit that also has to factor in credit card fees, marketing and overhead. The services favor subscriptions because they generate more profit and bring in steady revenue each month. Resnikoff says services profit about $4 per subscriber on the $9.95 subscriptions.
While Apple has a commanding share of the digital download market -- and sold 100 million songs from July to December -- rivals are doing well with subscriptions.
RealNetworks says it has 650,000 subscribers to its music services, which include Rhapsody. America Online says 350,000 subscribe to its MusicNet. Napster, which is splitting off from software company Roxio, has been shy about reporting subscriber numbers. It says 73% of revenue comes from subscriptions.
Gorog, CEO of both Napster and Roxio, says he agreed to sell Roxio in August to Sonic Solutions for $80 million partly because of his belief that subscriptions are the future. ''We wanted to concentrate 100%'' on Napster. The sale was finalized Monday.
The Napster portable subscription is available now in a test mode. In the first quarter, Napster will begin to loudly alert customers to ''Napster to Go,'' Gorog says.
To make it work now, users must work from within Windows Media Player. When it becomes part of Napster, it will work from within the Napster software.
''This is our way to explain to consumers how radically better the subscription model is,'' Gorog says. ''We think prerecorded CDs will be with us for some time, but 10 years from now, this will be the primary way people consume music.''
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