Opinion: why Napster can't fail with their new DRM-free venture

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katherine-hannaford-2.jpgKatherine Hannaford writes…

Can we call 2008 the heady days of digital music yet – can we? Can we? Sure, 2007 had its fair share of digital movers and shakers, with Radiohead pioneering the new music release formula, but with today’s news that Napster is going DRM-free, surely things can only pick up in speed?

Beginning life as an illegal P2P service in 1999, it was acquired by Roxio in 2003 after numerous legal battles with the RIAA and, err, Metallica. I’m sure there’s a generation of kids who only know of Metallica as those baddies who shut down their favourite way of downloading 50 Cent.

Napster’s move to go DRM-free, and offer MP3 file formats encoded at 256kbps, has inevitably led a lot of people to draw even more comparisons between them, iTunes and Amazon.

However, there’s no ignoring the facts, that iTunes currently has just EMI feeding them DRM-free tracks, and whilst Amazon has support from the four big record labels as well, it doesn’t have anywhere near the size of catalogue as Napster, who can also boast all the indie labels in addition to EMI, Warner, Sony BMG and Universal.

First, let’s talk about DRM, or Digital Rights Management. It’s become hugely unpopular of late, with Sony, Apple, Microsoft and also the BBC all taking frequent lashings with the barbed public tongue. Quite simply, customers want to be able to play the tracks they purchase on any device, and as many times as they want. Unfortunately DRM-riddled tracks have huge restrictions, and lock you into using certain MP3 players, such as the iPod. It’s a bitch when you convert to a rival hardware manufacturer, and discover all those songs you downloaded on iTunes for your iPod? Yeh, they won’t work on your new shiny gadget.

When iTunes announced they would offer all EMI tracks without DRM in April 2007, the whole industry applauded their brave move, however some questioned whether it was too little too late, especially considering the inflated price of the two million tracks.

September last year showed Amazon launch their MP3 site, which had full support from both EMI and Universal, later adding Warner Music and Sony BMG to the list. Two million 256kbps MP3 files are offered, with prices starting from 89 cents a track, but sadly the store remains US-only.

Napster, on the other hand, has promised all six million songs in its catalogue will be DRM-free, in a 256kpbs MP3 form, for 99 cents. Michael Arrington, over at TechCrunch, has ever controversially published his disappointment with the service, as it appears the DRM-free songs won’t be included in its pay-monthly subscription service, making it a rather expensive venture for music fans who’ll have to pay 99 cents every time they want one.

He claims that “Napster is still unprofitable and still makes most of its revenue from all-you-can-eat subscription sales”, hinting that Napster won’t survive as “the days of paying for recorded music are nearly over.”

I think that Napster will soon come to its senses and offer the tracks in its subscription service – as Arrington claims, that’s where it makes its money, and I think coughing up 99 cents a time will start to wear thin after the initial appeal of six million tracks wears off.

Of course, the subscription service does have its pitfalls – if you miss a payment, or cancel your subscription, all the tracks you’ve amassed over the months are rendered useless – a feature that couldn’t be employed with DRM-free files.

As much as I think Napster will succeed in its new venture, there are a couple of situations I can think of that’d really crumble Napster’s grin. iTunes could do a change of heart and surprise everyone with an announcement that all of its six million songs are to be offered without the evil DRM – after all, as they announced in early April, they’re the world’s number one music retailer, with four billion songs sold up until then.

Now, I can think of another music ‘retailer’ which has given away more than four billion songs – for free. Bittorrent, and other illegal P2P services. With more people biting into the Bittorrent apple with every passing day (only this morning it was announced that The Pirate Bay alone had a monthly unique user count of 25 million, and that’s not even the largest torrent site of all, although it is the most notorious), this is an obvious worry for legal download services such as Napster, Amazon, iTunes and eMusic.

Time will tell whether Napster will rake in the fortunes of its new venture, however I can’t see how it won’t succeed, considering the ever-growing thirst consumers have for these ‘free’ songs, and the general media backlash such crippled services have received in past months. Yes, BBC, Sony, Microsoft and Apple, I’m looking at you again.

Napster

Related posts: Napster announces DRM-free venture | Apple goes DRM-free with EMI

Katherine Hannaford