Napster's Bad Math

As always, the day after the Super Bowl is a time not only for celebration in one particular U.S. city, but for the examination of the best and worst of multi-million dollar Super Bowl advertising. This year, Apple once again joined with Pepsi to air two iTunes-themed ads. But iTunes competitor Napster also weighed in, with a remarkably awful ad that misled and, even worse, failed to entertain.

Apple’s two ads weren’t particularly interesting, although the first (featuring various people enjoing Pepsi bottles that broadcast songs) was much better than last year’s “I Fought the Law” ad. The second ad, featuring Gwen Stefani and Eve, was a confusing celebrity mishmash.

But Napster’s ad was the stink-bomb of the event. Don’t take my word for it—ask USA Today’s annual ad-meter.

In a Super Bowl that tried desperately to be inoffensive (thank you, Janet Jackson), Napster’s ad offended—by being boring and looking cheap. With Super Bowl ads, we expect style, we expect… well, frankly, we expect an actual budget . The Napster ad looked like it cost about 15 bucks to produce.

The ad featured the symbol of Napster—that cat with headphones—in a crowd of football fans, holding up a sign. Just as an aside, does anyone care about the Napster cat? Does anyone think back to the halcyon days of Napster, circa 2000, and have that cat icon pop into their head? Attention Napster: people remember the old Napster fondly because of the gigantic collection of music they could download without paying , not because of its funky-fresh cat mascot.

In any event, the ad wasn’t about the ridiculous cat. It was about the sign the cat was holding, which featured this equation:

Apple + iPod = $10,000

Napster + “Compatible Music Player” = $15/month

I was at the Music 2.0 conference last year, and the iPod-iTunes Music Store combo was the elephant in the room nobody wanted to talk about. Apple’s dominance clearly generated a level of respect—but of course, there was even more fear, uncertainty, and doubt. One speaker managed to move from a hearty congratulations for Apple’s online music efforts to asking the question, “Can Apple survive?” in less than a minute. He was lucky he didn’t get whiplash.

The hubbub at the conference was all about music subscription services—the product that Napster used its Super Bowl ad to promote. The ugly thing companies like Napster, Real Networks, and (of course) Microsoft don’t want you to know is, they’re not promoting subscription services because they think people want to subscribe to their music collections, paying a tithe of $180 a year and knowing that the moment they stop paying, everything stops playing.

No, the reason they’re promoting subscriptions is because they’re more profitable than Apple’s 99-cent download operation. Because these companies realize that most people who pay $180 a year won’t consume $180 worth of music, or anything close to it. Sort of how the local health club can make a whole lot of money by charging monthly fees to people who seldom, if ever, use its facilities. Or how HBO makes $130 a year from people who only really watch HBO during the three months when “The Sopranos” are on, but never get around to cancelling their subscription.

In any event, I don’t dispute that subscription services are a valid concept. In fact, I’d probably lay money on Apple introducing its own subscription service within the next 18 months, and maybe a lot sooner.

But that’s a topic for another, longer entry. Let me get back to the Napster ad and its fallacious claim that you’d need $10,000 to fill up an iPod. I suppose if you bought a song at a time on the iTunes Music Store, that’d be true. But people also buy music by the album at the iTunes Music Store. And they buy CDs. And they have an existing CD collection that’s waiting to be ripped onto their iPods. Yes, I spent a lot of money on those CDs over the years, but they’re mine —that means they won’t expire if I stop paying the music companies a monthly fee—and I can move them over to my iPod with ease.

Now let’s work the second equation. My wife, who does not follow these matters as closely as I do, said that Napster’s proposition seemed reasonable. The idea of paying $15 a month to listen to whatever you wanted isn’t that different from paying for satellite radio, for example—and online music subscriptions give you far more control than any radio station can.

But the math begins to break down once you realize that the $15 per month bill to Napster goes on forever, and if you want to keep your music forever, you’ve got to pay for it again. And the equation bursts into flames once my wife and the other 90 percent of the digital-music-consuming public realize that their beloved iPods are completely and utterly incompatible with Napster.

Did Napster go out of its way to mention that most of the digital music players currently in use won’t work with its service? Of course not.

Depending on how you listen to music, a subscription service might make a lot of sense. If Apple can combine its 99 cent tracks and $9.99 albums with a monthly service that gives you access to everything in the iTunes music store, I will be one of the first to climb aboard and give it a try.

But Napster’s math still doesn’t add up. Then again, who said cats could do math?

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