At Rocherster University not a single student bought a song on Napster's online store during the 2004 winter semester, writes British online newspaper The Register. This, despite the noisy agreement to offer an "exclusive" to the university that should have been the only possible alternative to the illegal download.
The alternative was, instead, and was attended with passion by the students, according to The Register. These are the two online stores, the iTunes Music Store and MusicMatch. Both have provided more extensive catalogs, more friendly interfaces and above all DRM management, digital property rights, considered more favorable by American university students.
Napster's attack on iTunes was mainly based on the idea of renting fixed-price music instead of selling with micropayments (as happens in the Apple store). Napster offered a discount on the cost of $ 9.95 a month which allowed partially limited access to the online catalog to download music, relying on the fact that Apple's competition to "fill an iPod forces customers to spend $ 10,000 in micropayments ".
The flat rate policy of Napster, chosen as an alternative more recently also by Microsoft for its online music store, in fact provides a summary of the idea that with a subscription you can download almost all the songs online, which you can then listen to for a long time time provided you always renew your pass. Otherwise the DRM contained in the music files crashes and these become unusable.
Apart from the iPod's appeal – not compatible as a format with Napster songs – which has certainly contributed to the failure of the "flat" music offensive, it is perhaps worthwhile to make another consideration. Usually the goods are sold by paying a flat-rate price that allows, in addition to possession (not temporary) the property. Instead services are usually paid "flat", in situations of convenience for the customer, and can be used without limitations or with certain limitations for the period of time in which you subscribe.
The confusion, to try to force the market in favor of the supplier, derives from the fact that we tried to pass off as a service what in reality is a good. That is, the natural propensity of the public to buy possession and ownership (albeit limited in terms of copy and so on) of the song good rather than considering access to the online music store as a service for which you pay a fixed monthly fee and which guarantees the musical experience only as long as you continue to pay the rent.
This second approach is apparently not considered favorably by the consumer because he probably thinks: "If Napster fails tomorrow, all the music I paid to hear what happened to it?" And the answer sounds strongly different from the experience of buying physical goods like a CD of a minor label that then subsequently fails and goes out of print.
In the last quarter of 2004 Napster reported losses of 24 million dollars and the company's future with the current business model does not seem particularly rosy. Similar considerations are made for Real and for the giants like Microsoft who have announced the intention to pursue a similar model in all sectors (such as ringtones and music for mobile phones) in which they have entered or are about to enter.