James Delahunty
3 Feb 2005 1:07
Napster has unveiled a new portable version of its music subscription service, which takes aim at Apple Computer's portable iPod music player. The company are backing their new service with a $30 million ad campaign. The campaign includes a Super Bowl television spot that urges consumers to compare spending $10,000 for 10,000 songs to fill their iPods or paying a $15 a month fee to carry songs from a catalogue of over a million tracks on Napster-compatible players. This $30 million campaign came as a shock to some analysts as $30 million accounts 70% of what Napster were expected to spend on a full year of marketing.
While $30 million sounds like a massive amount of money to spend on promoting their new service and slamming the iPod, Apple has already spent a lot more. "Apple has spent roughly a hundred million dollars or possibly twice that much to market iTunes and iPods. Now, Napster is stepping up to the plate," said analyst Rob Enderle of the Enderle Group. If there is one part of music download services that is discouraging to consumers it's the lack of ability to store your purchased music on a portable digital music player. Customers who have purchased an iPod can store songs purchased from the Apple iTunes music store on their iPods however, but is it really fair that if you purchase an iTunes track for 99c that you must get an iPod to be able to carry it around with you?
Chris Gorog, Napster's chief executive, said the company hoped to convince consumers that pay-for-download services were more expensive and antiquate by comparison with Napster's subscription model. "I think there's no question that the companies emerging as owning the top market share in this business are spending on marketing," he said. New DRM software from Microsoft called Janus is believed to be the answer for users complaining about not being able to take their music with them beyond their personal computers. It will be interesting to see how much of a success Napster's new service will be, and whether or not they can damage Apple's current dominance in the portable music player marker and online music downloading services.
Source:
Reuters