June 3, 2004
An Easy Way to Kill the Music Rentals Market
Microsoft released a technical beta of its new player, but here’s the real money line from a related Wired article
“With Napster’s subscription model, users would have access to the same number of songs but for a monthly subscription fee of $10. Of course, Napster plans to charge a little more for the portability option — “about the price of a retail CD,” Goldberg said.”
Oh good, because consumers don’t already have enough incentives to avoid renting music. The prices for subscription services are already substantially above the average yearly spending on music (~$71/person in 2002). Raising prices further to move to portable devices makes this even more of a boutique market. I understand why they would want to price discriminate, but that’s not a particularly easy thing to do when they have to compete with P2P. It seems like they’re going to drive away more consumers than they attract.
Filed by Derek Slater at 11:03 pm under General news
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