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Napster Goes Free April 30, 2006

Posted by David Card in Media.
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Well sort of. I think I’d interpret this as a well-executed, aggressive free trial strategy rather than Napster business model version 3. But I could be wrong.

Online users who try out a paid content service in a free trial are six times more likely to convert to paying customers than those who don’t. (Jupiter clients, see Figure 7.) Five months ago, RealNetworks’ Rhapsody brought out a Web-based, free trial version of its subscription service. But Rhapsody 25 limits users to 25 song or radio plays a month. Napster limits the plays of any given song to five times — ever — but otherwise you can listen to low-ish quality Flash streamed music as long as you want in any given month. I think Napster’s is the better exposure to an on-demand music service experience.

Napster is mimicking Rhapsody’s Web services play, but in a fashion that seems more MySpace-, or community-friendly. It seems pretty easy to paste Napster Links to any personal page, a wiki, or an email. If a link is clicked, Napster shows HTML ads in the resulting playerlet, as does Rhapsody.

When listening for free, every third song you’ll get a rich media ad. Napster says it doesn’t have current plans for streamed audio ads. So far, marketers can target by genre, or sponsor professionally-created playlists or Napster’s studio concerts. No user or artist targeting yet.

Napster is sharing ad revenues with labels, but it doesn’t appear to have renegotiated streaming royalties for the free product, so this may end up an expensive trialing mechanism. The Web/Flash approach enables Mac and Linux users to play (as with Rhapsody). Paying subscribers can use the Web app, but the client software strips out ads and gives a higher quality stream, and, of course, no play limits.

Napster is also introducing what it calls artist or topic “Narchives,” although even the beta isn’t live yet, at least not on Sunday afternoon. These are pages for consumer-created content, to flesh out the All Music Guide bios that all the services use.

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