Napster Burnpak encroaches on Apple's digital music dominance

Napster told visitors to the Consumer Electronics Show in Las Vegas that will take on Apple's iPod and iTunes next month with the...

Napster told visitors to the Consumer Electronics Show in Las Vegas that will take on Apple's iPod and iTunes next month with the Napster Burnpak.

The company and its parent company, Roxio, have struck a deal with Imation, a provider of removable data storage media; Case Logic, a portable media storage company; and US department store Target, to supply the device.

The Napster Burnpak will be available at all of Target's 1,227 US stores as well as at, and will include a prepaid Napster download card (worth $14.95), a Napster 2.0 and Roxio software pack, blank Napster-brand optical products from Imation featuring unique "value-added" promotional codes for redeeming free music downloads and Napster-branded CD cases from Case Logic.

Napster will release pricing details for the pack closer to the product's 15 February launch date.

By combining its brand with Target’s ability to reach consumers, Imation’s storage media products and Case Logic’s carrying case, Napster says is offering an "all-in-one, one-stop shopping" product that will provide stiff competition for both Apple’s iTunes and Wal-Mart's online music store, a Napster spokesman said.

Jupiter Research senior analyst Mark Mulligan said iTunes and Napster are already the market leaders. "If anything, Napster has a broader, richer appeal with its capabilities to burn music onto CD, for example, but iTunes has had a head start with iPod," he added.
Mulligan pointed out that Napster has been innovative in its effort to catch up with iTunes, having already struck a deal with The Pennsylvania State University, which offers students a "free" version of the service that is paid in part by the student's information technology fee to the university.

"Napster can take a bit of the market from iTunes and push further into the subscription market, but iTunes is established at the moment as being the a la carte digital music store and is likely to consolidate its position this year."

Apple announced its iPod mini earlier this week at CES and will sell the device from next month. "Apple is trying to learn from its painful PC experience where it saw its dominance of the market melt away [to Microsoft]," Mulligan said.

He believed the iPod mini's $249 price tag is too high, but added that he expected Apple to reduce the price to differentiate it from the original iPod.

One problem for both Napster and iTunes in the foreseeable future is the insistence by both companies on using their own exclusive formats. "Somewhere along the line, there will have to be a high degree of interoperability between the formats because otherwise it will limit the appeal to consumers if they have to play different music on various devices," Mulligan said.

Since Apple is already in the dominant position, Napster will most likely be the company that ends up offering the greatest interoperability. "What Napster really needs to be pushing towards is things like Windows Media Player, and being the service that plays music on all other digital non-iPod players."

The next battleground in the digital music market is Europe where both Apple and Napster are rushing to bring their music services. Apple, again has established a toehold with its iPod and Mulligan expects to see one or both services in major European markets such as the UK and Germany within the next few months.

Laura Rohde writes for IDG News Service

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