Napster Goes Portable

Napster today (Feb. 3) bows its Napster To Go portable subscription product and says it will support the launch with a $30 million marketing campaign that includes a Super Bowl commercial on Feb. 6.

Napster today (Feb. 3) bows its Napster To Go portable subscription product and says it will support the launch with a $30 million marketing campaign that includes a Super Bowl commercial on Feb. 6.

The U.S. service will carry a price tag of $14.95 per month and will be supported by hand-held devices from Creative Labs, Dell and iRiver, among others. Napster To Go had a soft launch last September.

Napster, flush with cash from the recent $80 million sale of its Roxio CD burning software business and a $52 million private placement, plans to use its marketing campaign to raise awareness for subscription portability and aggressively go after Apple on the notion of value.

In ads that urges consumers to “Do the Math,” Napster contrasts the cost of filling an iPod with à la carte download purchases from iTunes for $10,000 with filling a Napster To Go device for $15 per month. The marketing campaign will run for four months and feature print and online components in addition to TV spots.

Napster CEO Chris Gorog says that with subscription portability, digital music services supporting Windows Media technology finally have a compelling proposition to rival Apple’s iPod/iTunes solution.

“We have a much more competitive product to market going forward,” he says. “We’ve removed the thorn out of the side of subscription services with portability.”

He says the goal of the ads is to point out to potential iPod buyers that they won’t be able to use Napster or take advantage of subscription portability.

“We’re presenting a stark contrast between what our offering is and what the iPod/iTunes offering is,” he says.

Prior to the introduction of subscription portability, consumers had the option of either buying permanent downloads for 99 cents each or paying about $10 per month for an unlimited amount of music that cannot be moved off the computer.

Napster To Go -- which is based on Microsoft's Janus digital rights management technology -- allows subscribers to transfer an unlimited number of songs in the Napster subscription library of more than 1 million tracks to a Janus-compatible device for a monthly fee.

Among the advantages of the new Napster portable service, subscribers will be able to transfer programmed playlists of as many as 50 songs with a single click in a feature called “Play Lists to Go.”

Napster’s marketing blitz figures to be the first in a wave of subscription portability initiatives from music services and consumer electronics makers that support Microsoft Windows technology.

“By the fall, I think it’s going to be virtually impossible to find a WMA device that isn’t compatible with the technology,” Gorog says.

As part of the marketing campaign, Napster is introducing a “Works With Napster To Go” logo that helps consumers identify which MP3 players are compatible with the service. The Creative Zen Micro, the Dell Pocket DJ and iRiver’s H10 will all feature the logo, as part of co-marketing agreements with Napster. They will also be prominently featured in both Napster’s Super Bowl spot and subsequent print and TV advertising.

Best Buy, under an existing strategic relationship with Napster, will provide expanded in-store support of Napster To Go and devices featuring the “Works With” logo.

Napster To Go will also be available simultaneously on Napster U.K., priced at £14.99 ($28.27) per month. The campaign there includes strategic alliances with hardware retail chain Dixons Group and leading consumer electronics manufacturers, including Creative Labs.

Whether Napster To Go will tip the balance of popularity of subscription services vs. download stores remains to be seen. U.S. consumers downloaded 140 million tracks and 5.5 million albums last year, according to Nielsen SoundScan. Meanwhile, an estimated 1.4 million consumers were subscribing to a digital music service or online radio offering by the end of last year. Prior to the end of last year, Jupiter Research estimated that 2004 digital subscription revenues would total $114 million.


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