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Technology Stocks : Napster, Inc.

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To: D. K. G. who wrote (31)3/17/2005 8:02:03 AM
From: D. K. G.  Read Replies (1) of 44
 
'Napster To Go' Offers
Alternative to iTunes --
If You Keep On Paying
March 17, 2005; Page B1
PERSONAL TECHNOLOGY
By WALTER S. MOSSBERG

Apple's iTunes online music-download store dominates the digital music market. It has brushed off threats from multiple competitors. But now, a new type of online music service is launching what may be the stiffest test Apple Computer has faced in music.

This new service is called Napster To Go. It's a fresh iteration of the Napster legal music service, and it offers users a completely different model for buying and playing music, a model that Apple can't match today.

With iTunes, you buy new songs for 99 cents each. Once the songs are downloaded to a Windows or Macintosh computer, you own them forever and can do what you like with them, within certain limits. You can store them on multiple PCs, and copy them to an unlimited number of iPod music players. This has worked so well that Apple has sold more than 300 million songs.

But there's a downside to Apple's system: If you're a heavy music purchaser, buying thousands of new songs will cost thousands of dollars.

Napster To Go also allows you to download songs and to copy them onto a portable player. But Napster To Go doesn't charge for each song; in fact, Napster doesn't really sell them to you. Instead, it rents the music, for a monthly subscription fee of $14.95. As long as you pay the monthly fee, you can download as many tracks as you want. So, if you're inclined to download thousands of tracks, you're not out thousands of dollars.

For some time now, Napster and other online services, like RealNetworks' Rhapsody and Yahoo's Musicmatch, have offered subscription services that allowed unlimited downloads to a PC -- but not a portable player -- for a monthly fee. What's new about Napster To Go is that these songs can be copied to compatible portable players from companies including Creative Labs, iRiver and Dell. That makes the service a stronger competitor to Apple's iTunes and iPod combination.

Until the addition of portability, Napster and the other subscription plans had attracted a solid audience, but they hadn't been able to mount a major challenge to Apple. Now, with the addition of portability, Napster believes it can attract a large audience of music fans who want to try large amounts of music without a big out-of-pocket expense. RealNetworks and other subscription companies are expected to add a similar portability option in the coming months.

Apple has scoffed at the rental/subscription model. But if it takes off, the computer maker may be forced to respond with its own subscription service.

I've been testing Napster To Go with one of the best compatible players, the iRiver H10. The Napster software used to access the service isn't as well designed, or as simple to use, as iTunes; and none of the compatible players is as good as an iPod. But the combination worked pretty well.

There is one huge downside to the Napster approach. If you stop paying your monthly fee, the music dies. The song files will become inert and unplayable unless Napster is able to verify that you continue to be a subscriber in good standing. In fact, you have to log onto the service with a PC at least once a month and plug in your portable player so that Napster can verify your paid status.

This means that, if you build a huge music collection through Napster, you could lose all of it -- every single song, going back to when you started -- if you ever halt the monthly payments, however high they may go in the future. If you want to keep a song permanently, in the Apple fashion, you have to pay the same 99 cents a track Apple charges, on top of your $14.95 monthly fee. (Napster will sell you bulk credits for buying songs permanently that can lower the cost to around 79 cents a track.)

There are some other downsides to Napster To Go. Downloaded songs can be stored only on up to three computers, not the five machines Apple allows; and each PC can copy music to only three portable players, not the unlimited number in Apple's system. You can't burn rented songs to a CD; you have to first buy them for 99 cents.

Napster does have one nice feature iTunes lacks: It can synchronize your downloaded music among several computers, so they all have the same songs.

But Napster can be far more confusing to use than iTunes. Not all songs can be rented. Some can only be purchased. Others can only be rented, and not purchased.

The Napster software is also clumsier than iTunes. You can't see the status of downloads or of song transfers to a portable player without switching to a separate window. Searching for music, and creating playlists, is more awkward than in iTunes.

Also, in my tests of Napster To Go on three different PCs, I ran into repeated problems transferring rented songs to the iRiver player. Several times the transfer process choked, and I had to quit and start over. In one case, I received a mystifying error message that read: "I/O operation has been aborted because of either a thread exit or an application request."

I have never had such problems with iTunes.

Still, Napster To Go offers a real alternative to Apple's offering. It will be interesting to see how the market responds.
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