Napster to go free? Or maybe launch an iPhone/Android app


napster.jpgThere was a time when the word Napster struck fear and terror into the hearts of anyone connected with the music industry. Not any more though after the innovative music peer to peer service went legit in 2003 and began to offer online music to paying subscribers.

Today Napster is very much the forgotten online music service. It still has plenty of users – it had a turnover of over $100 million in 2007 – but it lacks the profile or innovative features of rivals like Spotify. The service was actually bought by US retailer Best Buy in 2008, a move which was barely noted this side of the Pond.

However on Thursday Napster is promising some big announcements in the UK which could see a significant change in its status.

So what will it say. Here are two scenarios

1 Napster to go free

The huge problem facing Napster in the UK at the moment is that Spotify basically offers a similar service – online music tracks streamed to a PC – for free. Spotify’s free model is funded by ads and bankrolled by the huge £40 million plus investment it has had so far. Even a head to head between Spotify and Napster’s paid for services – both £9.99 per month looks bad for Napster. Subscribe to Spotify and you lose the ads (as you do with Napster) but you also have the option of streaming music to an iPhone or Google Android phone. You can also access the tracks offline. None of which is currently being offered by Napster. Napster’s unique play is Napster to Go which offers allows users to transfer any track they want to mobile devices including phones. However this looks very out of date and clunky given mobile innovations like Nokia’s Comes with Music and iPhone apps from Spotify, Simplify Media and others.

So one option for Napster is to ape Spotify and deliver a free service. The problem is that, according to The Times, Spotify is apparently burning £4 million a month in servicing all those free users and only getting £60k in ads. That doesn’t sound like much of a business plan for Napster.

What Napster may do is offer a cut-down free service with fewer tracks than its rival and keep its fingers crossed that one day very soon Spotify either goes bust or ditches its freebie business model.

2 Napster iPhone/Android apps

Napster has had a bit of a frosty relationship with Apple over the years given that it championed Microsoft’s Windows Media player software and in many ways presented itself as an alternative to iTunes. However an iPhone app, which works in a simple way to Spotify and enables Napster users to access tracks on the move would certainly help Napster maintain its user base and might even grab a few new subscribers. An Android app would make sense too.

The other interesting factor in Thursday’s announcement is that it might give us a few clues as to how Napster will evolve in the US. At the moment Napster, and its rival Rhapsody, doesn’t have to contend with a freebie streaming service like Spotify. But Spotify will launch in the US some day soon (end of the year is most likely) and Napster will need a response if it is to protect its core market.

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