Napster has announced that it has cleared the 5 million tracks sold mark. Though still behind I-Tunes it is a laudable milestone and hopefully a portent of things to come. The greater the number of successful services and stores in the market place, the better. Consumers want choice online just as they do offline and ultimately Napster and i-Tunes are distinct (and to some degree complimentary) services. One is primarily a music store whilst the other is primarily a music service.
All that said, Napster still has some ground to make up. Napster claims to have 1.5 million ‘users’ yet the monthly number of downloads is about 1 and a quarter million. So that’s less than a track per user. In practice only a small subset of that 1.5 million are actually ‘paying’ users and Napster’s focus over the coming year will be to increase average spend among the early adopters and to migrate some of the remainder with the Napster application installed onto paying for tracks and subscriptions. The campus deals will provide a surge in their user base and should serve to both instil brand affinity nurture usage of legitimate services with these young users. The latter has got to be good news for the music industry as a whole and it is to be hoped that Napster has set a trend which will be followed by its peers.
Meanwhile neither Napster nor I-Tunes seem to be any closer to launching in Europe. I fear that same key hurdles I identified 2 years ago (fragmented rights landscape, intransigent labels etc.) may hinder potential new entrants who wish to replicate their US offerings.