The Engadget Interview: Chris Gorog, CEO of Napster

For this week's Engadget Inteview, veteran journalist J.D. Lasica spoke with Napster CEO Chris Gorog about why the original Napster kicked ass, whether it's better to rent or buy digital music, whether DRM still sucks, and when we'll see a true celestial jukebox.

Let's begin with a moment of silence for the old Napster. I'll admit I used it. Did you?

Oh, I absolutely used it.

What was the attraction that drew 60 million users in about a year's time?

I had a very passionate theory about that, and many questioned my logic, but I felt that it wasn't ever about free. It was always about the glee of being able to instantaneously access virtually any song you could think of, download it, move it to your MP3 player. The free part was almost incidental to the extraordinary foundational change in terms of the way people could interact with music.

Absolutely. Tell me where Napster was when you came on board, and how it's changed since Roxio acquired it.

Well, we bought Napster just a little more than two years ago out of a bankruptcy proceeding. We were very fortunate to pick up all the assets of the company, not only the name and brand and urls but also some peer-to-peer technologies that we think will be very valuable going forward.

We basically leveraged all of the good will associated with the Napster brand and then, of course, purchased the Pressplay company, which was a legal online music service previously owned by Universal and Sony, and we put those two groups of assets together and then set off on a mission to re-create Napster in a legal reincarnation.

So what's the value of the Napster brand today? It must be a double edged sword, with having to explain to people that you're now a legitimate company. And then you have the younger kids who probably aren't sure what all the fuss was about back in 1999-2000.

Well, we found that the value of the Napster brand is incalculable. Some statistics: 97 percent of Internet users recognize the Napster brand; 74 percent have very positive feelings about the Napster brand. When you start a digital music company, particularly with the breadth of competition we have from some very well-heeled players, it's an extraordinary asset for our small company to have by far the biggest brand, the most well-known brand and the most well-loved brand in he business. So it has been a very valuable calling card for us to start our business.

Tell me about Napster To Go. It's basically an extension of your service to bring Napster to portable players, where the future is. Is that right?

Right. Napster To Go was launched on Feb. 3. Basically, what we've been trying to do with the legal version of Napster is to come as close as possible to the experience people had with the original Napster. With Napster To Go you're completely unencumbered. You pay a monthly fee, you access virtually any song you can think of, you download it to your PC. And now you can move hundreds, thousands of songs to your MP3 player without ever having to pay 99 cents a track.

Each song is wrapped in DRM so that as long as you subscribe you can access it, but if your subscription lapses the songs no longer play.

Right. What we are providing consumers with is an experience where they can have this unlimited access and playback and portability for a monthly fee, and as long as they keep paying fee, they have the privilege of membership, if you will — sort of an all-access pass to the world's music library.

How many subscribers do you have?

As of Dec. 30, we had 270,000 subscribers. We've been growing very rapidly. Our last two successive quarters we increased our subscriber base by over 50 percent.

How are you doing compared to Musicmatch or Rhapsody or your other competitors?

Musicmatch hasn't published figures for quite some time; we believe we're in excess of their subscriber base. The other major premium subscription service is Rhapsody, and we are convinced that we should easily surpass them in the next three to six months. Then we'll be the No. 1 subscription service in music.

I want to ask you about the Super Bowl commercials. Honestly, were they a good idea? Hare you seen any immediate, tangible benefits?

The $30 million advertising campaign we kicked off at the Super Bowl has already been an over-the-left-field-fence home run for our company. We have dramatically increased our subscribers both to our basic service and to Napster To Go, already considering exceeding our targets. So I would have to say that we are thrilled with our marketing campaign.

I saw one of your ads that said something like, which would you rather spend: $10,000 for 10,000 downloaded songs or 10 bucks a month to listen to a million songs? What's the idea behind that?

Well, the idea is this. We don't really compete with iTunes. We feel we could compete with iTunes all day long and frankly kick their butt. iTunes probably has 10 or 15 percent of the comprehensiveness of what the Napster experience offers. In fact, we offer an a la carte download service similar to iTunes for 99 cents a track or $9.95 an album.

The issue for us is not iTunes but the iPod. The iPod has been so successful that what you have is a lot of consumers going into the marketplace, very excited about the opportunity for digital music, and they purchase the most well-known device. They don't know in advance that when they buy that device they can't use Napster or any of our other competitors. So they get trapped in the experience of iTunes.

Now, that experience is very one-dimensional and it's very costly. We thought it was important in our initial advertising rollout to really contrast the iPod/iTunes experience with the Napster experience and we think our advertising campaign's results show that it's been quite successful in getting people's notice.

Napster plays on mp3 players by Creative, Dell, Gateway, iRiver and Samsung, but it won't play on an iPod, which controls about two-thirds of the MP3 player market. Isn't that a big built-in disadvantage?

In the short term it has been a disadvantage. I think the real statistic that we look at is Apple controls about 32 percent of the worldwide MP3 market. So when Apple throws their statistics out, they never include flash players, which is an enormously important part of this market. Also, we fully expect iPod's share of the hard-drive device market to have a substantial decline during this Christmas selling season because virtually every MP3 player sold in America will support Napster To Go this fall — except the iPod.

So you're going to have consumers having to make a decision between last year's technology, your father's Oldsmobile, or any other MP3 player that will support this extraordinary portable subscription opportunity.

Why is renting digital music a better deal than owning it?

The easiest way to answer that is simply to go to Napster.com, download our client and take a free two-week trial of Napster. But let me try to describe why we think this is extraordinary. Imagine a day in the life of a Napster subscriber. You wake up in the morning, put on a playlist that you created while you're getting ready for your workday, you jump in your car with your MP3 player where you downloaded 10,000 tracks of your choice, and you're grooving in your car. You get to work and you turn on one of Napster's 50-plus interactive radio stations; you're listening to over 200 pre-programmed tracks of any genre you want. You get the picture.

It is just a completely immersive music experience, encouraging discovery, sharing, community. We give our members the ability to email songs to one another to check out playlists. So this experience is so dramatically different than going to a store, listening to a 30-second clip, and making a decision about parting with a dollar for a song.

The only downside, of course, is that once you stop subscribing, you're left with nothing but memories.

That's correct, but the way we look at it is kind of interesting. I believe that we are going to see a shift in the way consumers think about music. And that shift we're seeing very visibly at Napster. The point is simply that people are going to value instantaneous access to anything they can think of anywhere anytime. That's what they'll place value in rather than ownership — I own this CD, I own this track I downloaded. Because in the digital world, everything is available.

So it's really a paradigm shift for people to recognize that the music collections they've carried around with them on their back, all of this stuff doesn't matter anymore. Because for a monthly fee they can have access not only to everything they've collected in the past, but everything they don't even know about yet that they can still discover. It's a very different model and extremely attractive, once you get used to it.

The other thing I'd emphasize is, if people still desire ownership and they want to burn a CD or put together a compilation disc, they can still do that at Napster.

What about the new breed of file-sharing services like Kazaa? The trading going on there is illegal, but how is what Napster now offers superior to doing it the old-fashioned way?

That's an easy question. First, before you even get into the morality of it, the current peer-to-peer experience is fraught with peril. You've got spyware, viruses, you've got serious damage that can be done to your hard drive, you've got booby-trap files, all of the spoofing ware that the major labels are using. And it has turned into a Petri dish of corruption for your hard drive.

We actually had a focus group with a bunch of young kids who were all using the illegal services. We put them on Napster and they all went absolutely crazy. We said, would you pay for it? They said, yeah we would. I said, tell me why. This kid says, 'I've had to replace my hard drive three times in the last 18 months from using the illegal peer-to-peer services.'

Some of us have fond memories of the original Napster, but illegal peer to peer today is a pretty ugly playground. When you contrast that with the pristine digital environment that we've created at Napster, we think the benefits of paying are immediately seen. And then you have the knowledge and good feeling of knowing that you're not cheating the artists that you enjoy.

How did you come to the $15/mo. price point for your chief subscription offering? Is that as low as it can go from a practical point of view?

When you think about it, 15 bucks a month is one CD. So for the price of one CD you can have access to the world's music catalog, put it on your MP3 player. We came to that price point by doing some extensive consumer research and focus groups, and that turned out to be the sweet spot.

Of that $15 a month, how much goes to the artists?

We take some costs off the top and then we split the balance with the record labels. And then the record labels pay the music publishing out of their share and they pay the artists out of their share, which all depends on each artist's contract with the labels.

Generally, though, it would fall in the 5 percent range?

Five to 10 percent, depending on how powerful the artist is.

How many tracks does the average Napster To Go subscriber download?

We haven't shared that data yet. Since it's been out only a few weeks, I'm not sure we fully understand the trends. But what we're finding to be extremely popular is what we call playlists to go. So instead of just a 10- or 15-track playlist, we'll have 20, 30, 40, 50 tracks. We have one called Jazz 101, where you can just drag and drop the history of the coolest jazz in the world with one click to your MP3 player. You can just drag and drop the playlists you've already created on Napster. We encourage people to play around with world music and reggae and old-school R&B.

Besides playlists, what kind of recommendation technology do you have?

Certainly we have a recommendation engine that is somewhat typical of services like ours. If you search for Neil Young, we'll say, Users who searched for Neil Young also liked the Eagles and Jackson Browne. But in addition, we allow you to search for music in the playlists of other users. So if you find a unique blues track that turns you on, you can say, I wonder what else that guy has in his library? With your permission, we can allow people to dive in, just looking at your user name, and see what you're listening to. This is a feature our users are really enjoying.

Our new Napster client has the ability to take a genre page and make that your customized home page and landing page. Going forward, we have very ambitious personalization goals. Our vision is that one day when you log on to Napster, it will be highly personalized to each individual.

How many years away are we from a true celestial jukebox?

The major impediment to a true celestial jukebox in the legal world is the complexity of the rights clearances. This remains an important challenge for everyone involved in the business. The biggest problem, frankly, are the music publishers. It's just the sheer clumsiness of the way the music publishing organizations are set up.

In the United States, about 50 percent of music publishers' rights are cleared by one agency, the Harry Fox Agency. The other 50 percent are represented by 50,000 individual music publishers. So this is where it becomes a complex task for anyone to get out there and clear this stuff. We're trying all kinds of things to make the process simpler.

While we have the largest music catalog in the world, well over a million tracks, we aren't remotely satisfied. We want to keep adding hundreds of thousands of tracks as aggressively as we can. We have more than doubled our catalog in the past year or so since we launched. And this isn't with strange tuba orchestras, this is all with really high-quality major label and independent stuff.

What about a blanket license rather than doing it one by one?

You know, a compulsory licensing of the music publishing would be a tremendous windfall for digital music. It would be a win-win-win for everyone. It would get more content out there for consumers to enjoy. It would help propel our business, letting us get closer to that celestial jukebox. All of these teeny little music publishers from all over the world would have an opportunity for substantial income. Compulsory licensing is being discussed in Washington, and we'd love for it to happen.

It used to be during a weekend with the original Napster you could find songs from really obscure labels and eclectic artists. Now that Napster's gone legit, it's harder to find more obscure material legitimately online. What's the holdup with signing up the smaller indie labels?

Usually it's just the logistics of doing it. We have a pretty comprehensive music clearing operation. It's pretty rare that you run into someone who's not interested in licensing their music for digital distribution.

But I'll emphasize that 85 to 90 percent of the top 100 searches on Napster are successful. Consumers, nine times out of 10, will find what they're looking for.

Let's discuss the recent friendly jousting between you and Steve Jobs last month. When you heard that Jobs sent an e-mail to top record industry executives, alerting them to a security gap in Napster's service, what was your first reaction?

My first reaction was that he must be pretty frightened of the Napster To Go technology to be so petty. Frankly, that's what I think the impetus was for him to fire that off. It was really pretty silly.

He was claiming we had some sort of security gap, and of course we didn't. That technology — like recording something off of a radio broadcast — had been out there for 10 years. Certainly his service is susceptible to it as well.

We saw it as a sign of weakness, that he's very concerned about a technology that makes his hardware and his software irrelevant in our view.

The same afternoon you shot off your own email to the same execs, defending Napster's security and pointing out how trivial it was to unlock "a large collection of iTunes music in seconds." The point you were making?

We wanted to make sure that there wasn't any misunderstanding that there was a problem with the Napster technology. We hadn't been hacked, we still haven't, and frankly I doubt we ever will be.

Many analysts believe that the online music marketplace won't truly flourish until a lot of the digital handcuffs that are placed on consumers today are removed. What's your view of what needs to change in the world of DRM?

If you had asked me a year ago, I would have said that the DRM landscape is a mess and needs to be cleaned up. But I'm feeling much more positive about where we are right now.

I think this is a Windows Media Audio world. I don't think there's any question about that. WMA already dominates MP3 players globally. Even in the United States with flash memory players, the WMA format dominates the set-top box, and digital media adapter technologies — enormous corporations like Comcast, Sky, SBC, Murdoch's operations, are all designing their entry into the living room with digital media based on the Microsoft platform. So I think there's zero question that Windows Media Audio will be the prevailing technology for all platforms, hardware and software. That's why we've built our foundational technology around WMA.

I think the WMA DRM now is actually very good. In terms of digital handcuffs, right now with the Napster subscription you can download your content to three PCs and three MP3 players, which we think is very liberal. You can have one in your office, one in your home office, one down the hall in your kids' room. That's a lot of value for $10 or $14.95 a month. If you want to burn a track to CD, that's 99 cents. So I think we're getting to a very good place.

What happens if Apple counters Napster To Go with iTunes To Go? Do you see a music subscription service coming from Apple?

If they bring out a subscription service, then they will have a competitive product that's good for their users. Ultimately, their users will have to make a tough decision. Do they want to stick with a platform that is not going to be the ubiquitous platform for digital media around the world, that is not going to take them into the living room, for example.

The Apple technologies will always be what they have always been: really great in a completely closed, proprietary world. But at some point, people will lose their sense of humor about that when they realize that they're constantly running into situations and obstacles where they have a technology that has not been built on an open platform. The most obvious example is, if you bought an iPod and want to listen to Napster, you're screwed. That kind of is the Apple way.

Leaving aside the question of whether Windows Media is really an open platform, where does Napster stand with the record labels and the RIAA these days?

We have an excellent relationship with the five major labels and the RIAA. We started this game with a deep respect for artists' rights, and I think that the rights holders recognize that. The labels have been very proactive in helping us get ready for the portable subscription opportunity. While we always have little frictions along the way, they've come an enormous distance from where they were two years ago, when all they were doing was obstructing the progress. They've moved into a very proactive path.

Say I'm a musician and I want to get my music on Napster. What do I have to do?

At this point, we are only accepting music by signed artists. So we'd suggest that their record label contact me, and I'll make sure our music programming folks jump right on it. We are very, very interested in getting into every nook and cranny.

What is the state of online music services today, where does it need to go, and how does Napster fit in?

Our vision is that Napster is a branded music experience that people will continue to come to because they're relying on us as the genuine article that's going to present the most comprehensive music library in the most fun and interesting way. We want the consumer to go to Napster, when I'm interacting with music on my PC, when I'm filling up my MP3 player, when I'm making decisions about how I'm going to listen to music in my living room and in my car.

Today we're in a world of online music companies like Napster, satellite radio companies like XM and Sirius. You've got the satellite delivery of television through companies like DirecTV, or Comcast supplying music services through their television offerings. At some point, the consumer will grow weary of paying each of these separate entities for an uncoordinated music experience.

Where do you see Napster in 10 years, and what is it doing?

Ten years from now we are sitting on top of the legal celestial jukebox. We are one of the biggest names in digital music, if not the biggest. We are ubiquitous, and we are cross-platform. We are everywhere you want to listen to music — in your PC, in your living room, in your car.

---

J.D. Lasica is author of the upcoming book Darknet: Hollywood's War Against the Digital Generation.

[Alric @ Dec 19th 2005 12:11AM]

Let me see:

After five years of paying $25/month for subscriptions ($1500) I get to keep a total of 0 songs.

I don't think so...

[Doubtful @ Dec 19th 2005 12:11AM]

It's cute how he thinks the DRM will never be hacked.

[Joe Matt @ Dec 19th 2005 12:11AM]

He says subscription is the future, where does he prove this? Where dose he provide informatin, statistics, etc. Plus, if Napster is so great and wonderful, such a power, how come they have never come out with the amount of songs sold?

[narco @ Dec 19th 2005 12:11AM]

Wait wait wait a second, did he just say that Napster is cross-platform? I hope that doesn't mean OS's, because I get that lovely "Napster is currently compatible with Windows XP/2000" message.

You can totally tell what he's doing. He's trying to make the iPod seem "like, sooo last year" with these Grandpa's Oldsmobile comments. Something that could work, but I doubt many "hip" kids are reading the latest interview from a CEO of any major company, let alone of Napster.

Truth is, Apple still has the upper hand because they can start a subscription model too (if they start to see it working). ADC vs. DVI, Firewire vs. USB 2.0, they don't take their formats to the grave like Sony, they'll (sometimes) adapt to whatever consumers choose the most -- music subscriptions included.

Fishes,
narco.

[Oliver @ Dec 19th 2005 12:11AM]

"We don�t really compete with iTunes. We feel we could compete with iTunes all day long and frankly kick their butt. "

ahahahahahahaha... riiiiiiight.

i could kick Mike Tyson's butt but i just don't want to so i'm not gonna.

but i could!

so there.

[Evan @ Dec 19th 2005 12:11AM]

First, no drm required just a high quality audio out and a high quality audio in, and a cable. Second, say you own a mps player for three years, you will have spent $540 on napster to go, thats 540 tracks on itunes, that you can keep forever! Not to mention that you dont need to buy 10,000 tracks to fill an iPod, many people have CDs, podcasts, and mp3s from the good old days of napster or another p2p service. I predict that Napster's service is untenable, and when the service is discontinued, all that suscription money will be wasted. And you will be out in the cold, the silent cold.

[Vince Veneziani @ Dec 19th 2005 12:11AM]

This dude is so full of himself.

The service sucks. The plan is crap. And Apple prevails because it's GOOD. IT WORKS! IT'S LOVELY! And I use a Mac so I guess I cant use Napster To Go.

I hope he needs a trecheotemy.

[SteveJ @ Dec 19th 2005 12:11AM]

I have a fairly large library of music. The reality is that quite a bit of the older stuff (in terms of age in my library, not age of the music) I don't want to listen to any more. Tastes change. So what have I gained by owning that music versus a subscription model? Not much, really. I think paying a (reasonable) monthly fee for unlimited access to music would be appealing if it was of high enough quality and had a wide ranging/complete library (neither of which seems to apply to Napster). I'd sure as heck be more interested in paying a monthly fee for music than I would for TV (I don't have cable TV and don't have any desire to get it again)! That access to the music stopped when you stopped paying wouldn't bother me much, as long as the system actually worked. I would not want to lose access due to anything else as then it would suck royally. That is the big question mark, especially with anything Microsoft-related.

[Chris K @ Dec 19th 2005 12:11AM]

Can't wait till someone releases an app DESIGNED to crack DRM. The Winamp thing was quite a hack. If you were tricky using the LAME encoder, you could get free tagging. Sooner or later, someone (anonymously of course) will write an app that takes DRM'ed WMA tracks, decodes them for playback, and spits the files out to WAV with metadata, to be reencoded and tagged by LAME.

All DRM is hackable in this manner, there just isn't any software out to do it well.

[Digital Religion @ Dec 19th 2005 12:11AM]

I damn near choked when I read this.

Even being a napster user they've done really very little except dick me over. I just used their sync/restore option after reformatting and I'm missing 100 tracks which i had purchased which magically disappeared when I tried to sync restore. Wtf is that?

[ragnar @ Dec 19th 2005 12:11AM]

But the point of unlimited category for a small monthly fee is actually quite valid. Especially comparing to iTunes, in there I only buy and pay for items I really am convinced of that I will like and cherish. The chances of trying out totally new artists and genres becomes far more remote.

I basically want both of these options: buying the very best songs for myself to keep, but also having a huge stream of new things, new artists to find and enjoy. The fact that Napster offers both while iTunes doesn't should be of some concern to Apple.

[Chris K @ Dec 19th 2005 12:11AM]

Oh, I forgot... one thing Napster doesn't mention in their glossies: You can't get full albums for $15/month. At least not all of them. There is usually at least one track on an album that you MUST pay $1 to download, regardless of whether you're paying $15/month or not.

When he talks about this whole discovery of music thing, he's obviously not thinking of a customer discovering "Abbey Road", only to miss the dueling guitars in "The End".

[Alric @ Dec 19th 2005 12:11AM]

Other things that suck about Napster:

1. Can't pass on music on to your friends. iTunes includes copying to unlimited number of iPods.

2. WMA sounds horrible compared to AAC and MP3.

3. No Audible support and no audiobooks at Napster's site! WTF!

[Zak @ Dec 19th 2005 12:11AM]

I've tried the Napster to Go service. The quality of the 128kbps WMA files are terrible. Some artists did sound ok, but most sounded underwater.

The 128kbps AAC files (from iTunes) across the board have sounded better.

[OddManOut @ Dec 19th 2005 12:11AM]

"We don�t really compete with iTunes. We feel we could compete with iTunes all day long and frankly kick their butt. "

The term 'Delusions of granduer' comes to mind...

If Napster had an appealing hardware offering of their own(and STILL supported all other comers) they could COMPETE with iTunes (as they are now to a degree), but if Madman Billy G and his crew have never been able to knock Apple off the block for good and all in the computer industry, I don't think Apple could really be edged out by Napster in the music industry.

"I think this is a Windows Media Audio world."
"WMA already dominates MP3 players globally."

Wha?

Can any of you stat finders out there confirm this ? As far as I've been aware, MP3 is still the most common form of music on, dare I say it, MP3 players.

"We hadn�t been hacked, we still haven�t, and frankly I doubt we ever will be."

That's your que, Mathew Broderick...

'I don't believe that any system is totally secure'

...and of course he's right.

But why bother hacking the DRM ? With a little RTRC (Real Time Re-Capture), or the WAV file chicanery of CD freaks fame, the DRM of any song worth having (ie stealing) is easily bypassed...

"Celestial Jukebox" my[CENSORED]...

I do miss the only napster days of yore...
Now THAT was a celestial Jukebox...

[crsh @ Dec 19th 2005 12:11AM]

Someone please slap a tshirt on him that says "Hello, I'm a total .com has-been, I have no idea how to do business, I think you're all manipulable morons, and I want your money!"

[JMS @ Dec 19th 2005 12:11AM]

Tried it. Hated it.

The new Napster is pathetic. It's an interesting idea with huge potential but the implementation is mind-boggling in its poor execution. I tried, I tried, I tried. The sad fact is, it seems that there are some mostly-drunk chimps somewhere in charge of the UI. I have _never_ encountered such a poorly designed product.

And when I finally did get it to work, how do you all think the sound struck me? Poor, poor, poor! It took me longer to get the thing working than it did for me to realize the sound was awful and subsequently cancel.

What makes me nervous is that this company of questionable competence now has my credit card info.

[Jayson Elliot @ Dec 19th 2005 12:11AM]

It's too bad the interviewer didn't ask the one question I wanted him to ask:

"Do you think it was a bad move in your Super Bowl ad to tell everyone who uses an iPod that they are stupid? Is calling customers idiots really the best way to get them to come to you?"

[asidrephlux @ Dec 19th 2005 12:11AM]

"What was the attraction that drew 60 million users in about a year�s time?"

I still think free is the best answer.

[Mongrel @ Dec 19th 2005 12:11AM]

Well geez, not to go against the GRAIN here, but I started using Napster last month when - I - irnically - learned how I could re-rip the music into MP3 and carry it on my iPod. So really I'm living top hog right now. Is Napster perfect? No, of course not, but comparing side-by-side with iTunes I don't see any real depravities.

In fact, having used iTunes radio, RadioPlus from Rhapsody (included with Comcast now), Yahoo Launchcast and Napster, I can honestly say Napster seems to provide the most interesting, intelligent streaming channels. No matter what channel I'm on, I hear new stuff all the time that I actually LIKE - unlike the other services. Basically, I get a feeling like there are some actualy music pundits behinf the scenes.

CONS: A few. No real iPod support. That's Apple's fault, but still... Also, the BIG INCLUDED MUSIC CATALOG is a bit misleading, considering how many tracks I've come across that are BUY ONLY. Or, even funnier, "albums" that only include 7 of the 13 actual tracks on the disc. Can they do anything about it? Dunno. Still, sucks. Another smaller gripe is the whole system tends to lock up on occasion, just brings the program to a halt.

Do I plan to stick with it? Naw, I've taken what I want & I'll prolly cancel this month. But it's not a bad scheme, and like one poster said, if you're willing to pay for cable, why not new music? If I had a bit of extra cash I'd totally keep it.

[vebmetal @ Dec 19th 2005 12:11AM]

hmmm... interesting... I wouldn't be as critical of Napser, and praise Apple as many of the other people here do... because in the end you don't REALLY own either the songs from itunes or from Napster... at least you don't own them in the same sense as ripping your own mp3s (or WMAs or whatever YOU like) from a CD.... But I do give credit to Napster for starting a service that I, for one, find appealing. The way I look at, as long as the quality and variety of the songs are of a high standard, I don't mind paying $15/month for the rest of my life, and get ANY song I want to hear anytime I want to. If they can develop a player that connects to Napster wirelessly (say through cellular phone network) and you can get songs on the go.... that's golden!

[Brian @ Dec 19th 2005 12:11AM]

Indie labels often give tracks from VERY good new bands away for free. Try Podsiphon.com, download.com, etc. Personally, I selectively buy from iTunes and have never tried another service, so I can't comment on the comparison. But I do subscribe to Sirius and don't keep any of those tunes, so I guess it's really just whatever works for your personal listening habits. People need to stop whining.

[Jeff @ Dec 19th 2005 12:11AM]

"They don�t know in advance that when they buy that device they can�t use Napster or any of our other competitors. So they get trapped in the experience of iTunes."

Two things:

1. People with iPods can get their music wherever the hell they damn well please. I get mine from Amazon, mostly. It's called a CD.

2. There are a lot worse things you can get "trapped" into than iTunes. Like, for example, Napster... because once you have a Napster subscription, you have to keep it forever, or all your music is gone. Not a problem with my self-ripped mp3's and iTunes.

I also love his comment about how "mp3 players" are "dominated" by WMA. Uh, ok, then why aren't you calling them "WMA players"?

I came in here expecting to tell everybody to cut this guy some slack, he's only doing his job, etc. etc. But the guy is clearly a moron, so have at it.

[Billfred @ Dec 19th 2005 12:11AM]

He seems to miss one thing, though. He's talking about all of these MP3 players that can support Napster, but the iPod doesn't.

I hope he didn't forget that the iPod controls a rather sizable chunk of the market. Until someone comes out with an iPod killer, iPod compatability is a must to win in the digital music game. And, for better or for worse, there's only one service that does that right now.

[kwik @ Dec 19th 2005 12:11AM]

For more indie's go to www.GarageBand.com listen to the song for 30 seconds. Rate the artist then the majority let you download the full song at a high quality for FREE.

I have found some great artist here that are on the verge of breaking out.

[Boris Eder @ Dec 19th 2005 12:11AM]

Thanks for the Interview, this CEO seems to be funny.
Shouldn't the kids buy Macs and iPods, if they REALLY crash their HDDs.
But all in all, (NEW) Napster sucks!
For �15 I prefer buying CDs at Amazon (or at Itunes). I like having & storing my OWN music.

[Joe @ Dec 19th 2005 12:11AM]

The artist only gets 5%? According to Downhill Battle, artists at iTunes get more than twice that - 11%! Why would an artist want to deal with Napster - so they can get royally screwed?

[Eric @ Dec 19th 2005 12:11AM]

Oh please, this nonsense from Napster/Roxio just has to stop. When are they going to be a modicum of reality in their over-hyped rhetoric?

This is a WMA world? Apple is kicking MS's butt on DVD, MPEG4 is open, WMA is not.

The perambulating about on the suburbs of veracity, and economizing on the truth has got to stop!

[Brad @ Dec 19th 2005 12:11AM]

We subscribe to everything! We subscribe to television, we subscribe to radio, we subscribe to movie rental service - why is a subscription music service so hard to swallow! The truth is, this is probably the way digital music is going. I'm surprised that people (engadget readers) who I would think are very technically "with it" are so stuck on the "old" way of doing things. Open up your minds people! The price may not be exactly what you want and the interface may not suit you well but the concept is better than anything else out there. 99 cents for a song is unfair and never going to work in the long run.

[jdb @ Dec 19th 2005 12:11AM]

#18, Mongrel said:
"CONS: A few. No real iPod support. That's Apple's fault, but still..."

Hmm, is it Apple's fault that WMA DRM doesn't work on the Mac? I will suggest that you are much more likely to get Apple support for WMA DRM if Mac users could use it. In what universe do you think Steve Jobs is going to support a Windows DRM scheme that doesn't work on the Mac?

[Permanent4 @ Dec 19th 2005 12:11AM]

"Say I�m a musician and I want to get my music on Napster. What do I have to do?"

You could start by reading this:

http://log.onlinemusicworld.com/itunes-on-the-cheap/22

[PokySharpy @ Dec 19th 2005 12:11AM]

I'm going to try out the two-week trial, and I am an iPod-owning iTunes(the app)-loving music fanatic.

I'm a very "hands-on" music lover. I enjoy the rack of CDs behind my desk chair. I've always liked the tangible "having" of CDs.

I've always thought the iTunes Music Store wasn't for me. I don't buy my music a-la-carte. I love full albums, and the artists I enjoy aren't single-driven Top 40 bullcrap. To buy a full album on iTMS would require the same investment as a physical CD in most cases - except I can rip the CD in any format I want, share with whomever I want, etc. So the store never had much value to me.

In my opinion, the real value in online music is finding new stuff. And this is why I'm going to be signing up for Napster. For $15 a month I can listen to full albums, try out new artists, get really nice radio stations. If I hear a song on the radio out here in L.A. (Indie 103.1 rocks!) I can check out the whole album on Napster, not just 30-second soundbites from ITMS. Granted, I can't play it on my iPod... which is something that can be remedied by exploiting the "analog hole."

After listening, I can then go out and buy the CD if I want! It's a much better sampling and discovery service than iTMS could ever be. To me, this is the real value of a subscription service, as long as it's comprehensive.

So I'll check out the 2-week trial. It just makes me sad to hear the ravenous Apple fanboys say "OMG LOL HE'S DELUSIONAL ITUNES ROX YOUR BOX" when this could be the next big thing for online music. If Apple was doing it, you'd be all over it.

Once again, for the record, I love my iPod, and I love iTunes (couldn't live without Smart Playlists). But I do know that sometimes people outside of Apple can make good things happen.

[Jeff @ Dec 19th 2005 12:11AM]

It's too bad the interviewer didn't ask the one question I wanted him to ask:

"Do you think it was a bad move in your Super Bowl ad to tell everyone who uses an iPod that they are stupid? Is calling customers idiots really the best way to get them to come to you?"

Apple calls their own customers iDiots. It seems to work for them. (They do it a lot, but I'm thinking of all the "switch" TV commercials right now.)

[010111 @ Dec 19th 2005 12:11AM]

#21 basically already said it... but i love how he keeps mentioning "MP3 players" again and again and again... yet Napster 2.0 doesn't freaking sell MP3s. and then he even says "WMA already dominates MP3 players globally." ... yet a line later is already talking about "MP3 players" again. WMA clearly doesn't dominate *mindshare*... even amongst one of it's biggest proponents!

[Bigland @ Dec 19th 2005 12:11AM]

I have never used the "new" Napster but I agree with #24 that this is the future (click my name to read my take) I'm also surprised that the Engadget crowd are so reluctant to new concepts like this. The Mac crowd are proud of being the "alternative" and root for the minority, aren't they? If so, why root for iPod, which is currently the "majority"?

[Bigland @ Dec 19th 2005 12:11AM]

Oops. I mean I agree with #26 (and #29 too. BTW, I disagree with #24. If my 15 bucks go to Amazon, I only get to listen to 1 new CD per month versus many more times than that on Napster)

[narco @ Dec 19th 2005 12:11AM]

#32, who said the Mac community only roots for the minority? This is like OS racism up in here.

They don't "root for the minority" so much as they just prefer stuff to work properly and have a decent design. I did like the black m:robe "mini" but it didn't perform properly. Find me an mp3 player that works as seamlessly with iTunes and has a design that doesn't look like Michael Dell pulled it out of his toilet and I'll consider it.

Fishes,
narco.

[Monmin @ Dec 19th 2005 12:11AM]

Napster-to-go makes perfect sense as a way to discover new music. Or just to enjoy all the latest pop albums without having to buy them all. For instance when Mariahs new album comes out, I'll be curious to hear all the songs on it. I would have absolutely no intention of buying her new album though. There are many records that fall into this category for me.

[The Jeremy @ Dec 19th 2005 12:11AM]

Stupid, stupid, stupid. First off, no matter how many features the other MP3 player makers cram into their devices, the vast majority of the public wants an iPod. All the others are functioning like they are "Gobots" to Apple's "Transformers" brand. So Napster's outlook will not improve any for X-Mas 2005. The bump in their subscriptions is solely because of how hard Best Buy is pimping the service so they get their cut for every one of their customers that sign up. And most of these customers will cancel the service because the Best Buy employees are even telling them about how to cancel out and not being covert about it. Sooner or later, Napster's funds will dry up due to their advertising, unless Microsoft comes in and funds them with some venture capital firms to keep them afloat. And finally, the new Napster is to the original Napster what the new SCO is to the original SCO; an imposter.

[Alex @ Dec 19th 2005 12:11AM]

I think a subscription model absolutely can work, and I would be the first in line to subscribe to it. But only if there's the content there to back it up: full albums, and songs from the deepest corners of niches. And there's got to be a fair compromise in the DRM. I should be able to burn CDs. I should be able to move it around on my different devices. And should I have to unsubscribe, perhaps I can keep what I have at a wholesale $/per MB rate or something. Or at least let me keep my library intact but maybe unplayable until I resubscribe.

If Napster can get their stuff together, I'd be interested. For now I'm totally locked out of the model by means of using a Mac. The potential for someone to clean up in this subscription model of music is there for the taking. But I don't see it happening for at least another few years, until the music publishers loosen their reigns on digital downloads and face that this is where the future is headed.

On a side note, oh how I miss Audiogalaxy. That was the closest to a celestial jukebox as I think we've ever known.

[Kev @ Dec 19th 2005 12:11AM]

His counter to Apple entering with a subscription model is that it's a WMA world, especially in the living room. He spouts off a few companies, and tries to make Apple sound closed, proprietary. But contrary to his assertions, WMA is proprietary, the Media Center still doesn't sell very well, and Apple is going with MPEG-4/H.264/AAC-HE.

The interviewer should have brought up the MPEG-4 open standards. The fact that it is gaining rapid acceptance globally in cellular, television, satellite, cable, etc. And that Microsoft's VC-1 (WM for video) is still not approved as an open standard and is having patent problems. And that nothing prevents Apple from entering into the living room.

[Big Bob Biggins @ Dec 19th 2005 12:11AM]

I think its sad that the investors of Napster are going to loose all their money. Just read through these posts and you can see Napster is doomed. Subscriptions don't last.

Someone said a $1 was too much. Sure beats the $12-$15 you would have spent for the whole album for only that one song.

[OddManOut @ Dec 19th 2005 12:11AM]

Those that have suggested schemes wherein the music can be kept after the subscription has lapsed (either as a list with the option of resubscribing and reactivating your music, or a cut rate buy out), I think, are on the right track.

If iTunes has taught us nothing else it's shown that people actually ARE willing to pay for their music, why make it a hassle and a gamble to ? Every forget to pay your phone/electric/water bill and have to do it late even though you had the money? It happens. I don't think people should be penalized for being human.

You know what would get my $15 - $20 bucks a month (as far as subscription music goes) ? A nice sleek little wireless device (a style might be nice) that STREAMS me my music. Basically a radio that plays me whatever I want whenever I want it, wherever I am. I'd forgo ownership of the content for THAT ease of use.

(Bsides, you could capture that audio stream direct to an MP3 -> CD just as easy as you can bust Napsters DRM if you're determined to have it in plastic)

No Napster probably can't provide this mythical service to me for $15 - $20 bucks...probably no one can. Not now anyway. But with satellite radio, EV-DO, and various other technologies rising I think it could be doable in the near future. In any case, that's what I would want for all the hoops I'd have to jump through with a subscription based service. And to be honest, I'm content to wait until it's possible...

It's not like the P2P community ain't still around...(JK)

[mike @ Dec 19th 2005 12:11AM]

We actually had a focus group with a bunch of young kids who were all using the illegal services. We put them on Napster and they all went absolutely crazy. We said, would you pay for it? They said, yeah we would. I said, tell me why. This kid says, �I�ve had to replace my hard drive three times in the last 18 months from using the illegal peer-to-peer services.�
======

Ahhh, Windows...

[mike @ Dec 19th 2005 12:11AM]

His last stronghold is flash players? 10,000 songs I think not..

[dobz @ Dec 19th 2005 12:11AM]

"So when Apple throws their statistics out, they never include flash players"

The two-thirds of the mp3 player market was including flash players, Apple controls 95% of the HD market.

[Anonymous Coward @ Dec 19th 2005 12:11AM]

Is it just me or does this dude look exactly like Kelsey Grammer (Frasier) ?

[Josh @ Dec 19th 2005 12:11AM]

"1. Can't pass on music on to your friends. iTunes includes copying to unlimited number of iPods."

Please elaborate. In order to sync to an iPod, the file needs to be authorized first. We're allowed 5 authorizations. If I plug someone else's iPod to my Mac, it asks if I want to marry the iPod to my Mac, effectively erasing their music files...

So how, in the real world, can I use "share" my iTMS purchases with friends and their "unlimited iPods?"

[RuneSpyder @ Dec 19th 2005 12:11AM]

All of these music download services suck. When I pay for something that is downloaded to MY COMPUTER, IT SHOULD BE MINE and I should be able to do with it what I want.

I am not a criminal and I don't go around handing out free music to friends. I pay for what I listen to. Why do I have to be treated like a criminal that is automatically going to start pirating music as soon as I get the chance? FU iTunes, FU Napster....

[lilliedugg @ Dec 19th 2005 12:11AM]

Well, they don�t sell MP3s, they�re not cross plattform and the GUI ; How the hell is it even possible to make such a useless GUI ? But the idea of subsription is not stupid. Personally I am a collector so mostly I buy the CDs I wanna have, rip them in 160 AAC in iTunes. As I live in Norway we don�t have access ti iTMS yet. If subscriptions turns out "the next big thing" ( doubt it ) it shoudn�t take Apple more than a week or two to add it as a service in iTMS...
If we could make DRMs go away or at least have an "open" standard that would help.