Napster have announced the launch of a MP3 download store. What does it mean?
1 – Napster recognize the value of DRM free downloads as a means of differentiating from Apple (whom most of the majors are still holding their MPS catalogue from)
2 – It enables Napster to sell into iPod owners
3 – The premium subscriptions business doesn’t present enough dynamic growth to Napster on its own
But Napster are playing a dangerous game. By adopting MP3 they are tacitly accepting that the best consumer proposition is with MP3 but that means they’re also implying that their core premium customers are having to tolerate the inferior proposition of DRM.
What can Napster do? I’ve said this before (and some of my colleagues firmly disagree with me on this) that premium subscription offerings need to go DRM free across all of their service i.e. All You Can Eat MP3. An up front 12 month subscription fee would be a decent tactic of mitigating abuse. But we are nearing the stage where there may be little other way of saving premium subscription services. If I am a consumer choosing between a free, all you can eat music subscription service that supports device portability for free (i.e. Comes With Music) or basically the same service that basically offers the same for 10 Euros, pounds or dollars a month, I think I know which I’d choose.