Subscription based music services have a niche appeal. But under Best Buy’s ownership, Napster is truly attempting to go mass market. First it came up with its 5 for 5 offer, whereby you pay $5 a month for unlimited streaming and you can keep 5 MP3s at the end of the month. And now it is giving that away for free for a year (i.e. 60 MP3s and unlimited streaming for a year) when you buy select Dell PCs from Best Buy or directly from Dell.
It’s a great offer for consumers. It’s also a no brainer for Dell. Free Napster for a year can really help them differentiate in a highly commoditized PC markets. How it will work out for Napster remains to be seen. In order to be successful, Napster will have to hope that
- enough Dell buyers will go home and start using the service,
- but not too much so as to keep the cost of streaming under control,
- get hooked on to the experience so that a decent percentage converts to paying customers at the end of the year (which is the toughest part)
- and stick around for a few years so that Napster can recoup the acquisition cost and make some profits.
Its success will mean a lot not only to Napster, but to music industry as a whole. It will pull subscription services out of the rut that they have been in lately due to the recession and bring new buyers to the digital music fold. Although, they missed the back to school shopping season, this product is well suited for teenagers, college bound seniors and their parents. Targeted to that audience, this offer can hopefully discourage file-sharing.
A bigger challenge for Napster is making it successful in U.K. and Germany where PC-based music subscriptions have historically had a harder time than in the US and where competition from phone-based offerings is now quite high.