Tuesday, May 17, 2005
Napster Doesn't Plan to Cut Prices
Posted by James Fee in "NEWS" @ 05:00 PM
"Napster Inc. does not plan to cut the price of its online music subscription service despite new competition from Yahoo Inc., Chief Executive Chris Gorog said on Monday. "We are not positioning our product as a discount product. I think Yahoo has," said Gorog, referring to advertising in the Yahoo service. The Napster executive said he would wait to see whether Yahoo's move had an impact on its business and but ruled out cutting prices on its own music services for now."
He said only what he could about the price difference. It doesn't sound like their business model allows them to cut prices or they would have (at least down to $7.95). The wait and see attitude is probably best at this point as we don't really know how many more people will jump into subscriptions at this price. Buying music from a provider is like buying gas. Sure you have some brands that you prefer, but when the cost difference is great, you'll go with the lowest price. Same here, its not like the Yahoo! product is any less than the Napster product (Jason and his Yahoo! Instant Messenger problems aside). I think people for whatever reason would pay extra for an Apple branded iTunes product, but i don't really see much that Napster can do since Yahoo! has so much more integration on their side. I suspect we'll see someone buy up Napster (Sony, Google, Samsung?) and drop the price down to Yahoo!'s.
He said only what he could about the price difference. It doesn't sound like their business model allows them to cut prices or they would have (at least down to $7.95). The wait and see attitude is probably best at this point as we don't really know how many more people will jump into subscriptions at this price. Buying music from a provider is like buying gas. Sure you have some brands that you prefer, but when the cost difference is great, you'll go with the lowest price. Same here, its not like the Yahoo! product is any less than the Napster product (Jason and his Yahoo! Instant Messenger problems aside). I think people for whatever reason would pay extra for an Apple branded iTunes product, but i don't really see much that Napster can do since Yahoo! has so much more integration on their side. I suspect we'll see someone buy up Napster (Sony, Google, Samsung?) and drop the price down to Yahoo!'s.
