The Re-Launch of

NAPSTER
Group 7
A V I S H E K N A N D Y
D E B A Y A N B H A T T A C H A R Y Y A
A K A S H K r . A G A R W A L
A A S H I S H N . A B R A H A M
R O H A N G U P T A
INTRODUCTI
ON

MUSIC SHARING
SERVICE
• FREE
• P2P ( Peer-2-Peer
)
The Original
NAPSTER
26.4 M
FEBRUARY, 2001

‘ I Disappear ’ (demo song) – METALLICA

Lawsuit launched by
RECORDING INDUSTRY ASSOCIATION of AMERICA (RIAA)

$8M S H AW N FA N N I N G – 1 9 9 9
BERTELSMANN AG - ROXIO Inc. - PressPlay Service
( N o r t h e a s t e r n U n i v e r s i t y, B o s t o n )
 410,000
Subscribers
US, UK & Canada

NAPST 14.95
ER Euro
Each month

In
1.5 Million
2005
Japan (through partnership) Songs
Revenue Generation
By
NAPSTER

OFFLINE DOWNLOAD ONLINE SUBSCRIPTION

 NAPSTER
Proposition
WINDOWS DIGITAL RIGHTS MANAGEMENT Software
NAPSTER
v/s
i Tu n e s
 NAPSTER
Continue to build
Strategy
Continue to Innovate by Continue to Pursue & Continue to Pursue Strategic
NAPSTER Investing in New Services Execute Acquisition &
Consumer brand. & Technologies. Strategic Partnership Complementary Technology.
 CUSTOMERS

The REGISTER (2005) reported

750,000
USERS
55
MILLION TRACKS
80%
Over 25 yrs of age
 DISTRIBUTION

Business - 2 - Customer BUNDLE Service with Hardware

Directly to end user

www.napster.co Iriver, Dell, Creative

m Labs, Gateway &
Samsung
 Itunes, Amazon, RealNetwor

COMPETITION R h a p s o d y I n c . , Ya h o o ! U n l i m i t
Sony Connect, AOL Music, MusicNet & MusicN

5
5 C O M P E T I T I V E F A C T O R S ( a ff e c t i n g N A P S T E R )

4.1
4

3 2.9 P R O G R A M I N G & F E AT U R E S
2.4

2 QUALITY OF CUSTOMER SUPPORT

1.2
1
1 0.8
0.6 C O M PAT I B I L I T Y

0
2002 2003 2004 2005
PRICE & PERFORMANCE

NAPSTER Others
 EMPLOYEES
Online Music
10

Finance
37
Sales
25

Engineering
63

Online Music Sales Engineering Finance

 FEW RISK
FACTORS
01. Success depends on ability to Add New 06. Network is subject to Security & Stability
Subscribers. Risks.
02. Relying on the value of NAPSTER 07. Subject to Intellectual Property
Brand. Infringement claims.
03. Relying on content Provided by Third 08. Availability of Playback on different
Parties. hardware.
04. Online music distribution was 09. Growth depends on Increase use of
very new. Internet by users.
05. Lack of Availability of Popular 10. Relying on Broadband Technologies to Serve
contents. customers.
 FINANCES
They are expecting incur net losses for
atleast the next twelve months.

Despite growth in Subscriber and revenue NAPSTER has experienced

significant net losses since its interception.
CASE STUDY QUESTION

‘ Evaluate how Napster has varied each elements of marketing mix

to compete with traditional and online music Retailers. ’
 PRODUCT

Offer unlimited access within the catalog of

over 1.5 Million songs to subscribers.

Features Radio stations based around particular

artists and recent songs list based on particular
artists and recent songs based on customer downloads.
 PRICE

• Subscribers pay up to 14.95 Euro each month to gain access

of about 15 million songs.

• Subscription gives one user to listen to music as many as songs,

but competitor such as apple allows users to purchase songs on each track basis.

• NEPSTER also provides several ways for their customers to pay services via
Credit card, Debit card, Gift cards
PROMOTION

• NAPSTER has build brand identity by participates in

traditional offline and online marketing.

• Offline which includes television, radio, print advertising

and Online marketing program consists of advertise placements
on the website including affiliate partners and Search Engines.

• Company collaborate with different technology companies

(Microsoft, Intel, Dell, Toshiba) for innovation.

• Collaborate with retailers such as Best Buy Dixons, Target for gift card distribution .

• Promotional offers for customers by referring friend to subscript with NAPSTER.

 PLACE

• Napster currently provides digital music streaming service

in United states, Canada & United Kingdom.

• Company needs to focus more on localize contents to

maintain competitive advantage.
 PEOPLE

• Napster hired 135 employees:

10 workers to Support the online music service
25 workers in Sales and Marketing Department
63 in Engineering,
37 in Product Development and Finance.

• These employees must meet the customer satisfaction and the possibly problems,
to ensure that they hire employees who have at least 5 years experience in specific domain.
PROCESS

• Efficient customer service.

• Updating new contents into platform.

 PHYSICAL EVIDENCE

• NAPSTER provides unique 24x7 personalized online experience to visitors and customers.

• Website contains company’s:

Information
Details of the Management
Job offer availability
Etc.

• Customer support for new and current of NAPSTER subscribers with Frequently Asked Questions (FAQ)
available or give a feedback by sending an email.
Thank You.