The Cat's out of the Bag, Napster reset

Yesterday Napster introduced a new free interactive ad-supported version of its digital music service at Napster.com. The site now offers a Web-based cross-platform music player that provides access to its catalog of over two million songs, which users can play for free up to five times. The company also offers ad-free premium subscription versions of its service, ranging from $9.95 to $14.95 per month, and sells the songs in its library for 99 cents each.

Another new Napster.com feature allow users to e-mail or post NapsterLinks to blogs or websites, providing direct links to streaming full-length versions of songs through the Napster music player. NapsterLinks are URLs that link to specific songs, albums or artists in the Napster.com catalog that can be created using a simple, free tool available on the Web site. Music fans can now share legal music across the Web by putting the NapsterLinks they create into any of their electronic communications. Clicking on a NapsterLink anywhere on the Web causes Napster's Web-based music player to open and begin playing free Napster music. Napster will split advertising revenue from the site with record labels.

Party Like it's 1999

This new "free" service looks as though it brings Napster full circle from its earliest days as a free online music destination in the late 90's -- but this time around it's doing it in a 'legit' way that's designed to upsell consumers to subscription packages (whether at home or on the go). And at the same time allow advertisers a slice of the pie, bringing in incremental revenues in tandem. Napster offers advertisers access to millions of music fans & an association with one of the most well-known online music brands.

The question is will this new strategy pay dividends to Napster and help ensure its presence as one of the top online music destinations? In recent months it's been accused of overspending with its ad campaigns while revenues have been in decline. Napster is a major consumer brand, and I do believe it will succeed both at attracting premium advertisers as well as upselling consumers to subscription packages. It's a smart strategy to allow listeners to experience a song (or an album) several times prior to making that purchase decision. And if they do it often enough they'll likely see the benefit in becoming a subscriber. The key is for Napster is to retain (and expand) its loyal user base. I think this is one way to do it so I'm betting this strategy will in fact pay off for them. The NapsterLinks plan is equally compelling and makes a lot of sense in terms of extending the brand and engaging in legal P2P efforts. I'd welcome your thoughts &comments.......do you think these new strategies will have an impact?

Hello Kitty

During the original Napster days in the late 90s, I had suggested to the management team at the time that they leverage the power of their brand to license it to all manner of consumer goods -- including portable MP3 players, clothing, sunglasses, bedding (cat logo), you name it. That's a strategy this new team has yet to deploy, but could wind up re-igniting the fervor of the brand from days of yore; and of course prove to be a licenzing bonanza resulting in a whole new revenue base for the company. They're one of the few brands who I believe could get away with something like this.......what do you think??