Napster sets launch date for UK; iTunes plays coy

After much anticipation over when Napster 2.0 would reach European shores, Roxio Inc. said Tuesday it will launch its Napster LLC online music service in the U.K. "before the end of the summer."

The localized version of Napster 2.0 will be the company's first foray into the European market and will be headed by Leanne Sharman, who was named as Napster U.K. general manager, a title that was added to her existing job of vice president of business development.

Roxio, of Santa Clara, Calif., plans to offer the music subscription service throughout the rest of Europe, but has no timeframe yet for doing so. "Once the service is established (in the U.K.) we will then look to roll out Napster across Europe on a country by country basis, with localized content," said Napster U.K. spokesman Adam Howorth.

The company also declined to give a specific date for Napster's launch or to outline what its pricing plans will be. "Pricing will be compatible with the U.S. model of Napster," Howorth said.

It is unclear if Napster will get its service to the U.K. market before its rival, the iTunes Music Store from Apple Computer Inc., as Apple continues to remain tight lipped on its plans. Speculation within the industry has long been that iTunes will receive a U.K. launch in the second quarter.

"We don't have any comment on iTunes," said an Apple spokesman in the U.K. "We haven't released any information on the service, and though we are aware of the reports in the media and elsewhere, we do not comment on rumor and conjecture."

Apple Chief Executive Officer Steve Jobs has said the company aims to launch iTunes services in Europe in 2004, and that the company expects success similar to the levels its has enjoyed in the U.S. In January, he announced that 2 million iPods and 30 million iTunes Music Store songs had been sold since both were announced.

"Both Apple and Napster are going to be on track to launch European services this year," said Mark Mulligan, senior analyst with Jupiter Research in London. "My suspicion is that Napster is going to come out just a little bit before Apple, partly because Apple has continually insisted it will launch iTunes in Europe only when it is assured it can replicate the same usage it has in the U.S."

Apple has competed hard with Napster in the U.S., going so far as to announce late last year that between Oct. 28 and Nov. 3 it had sold 1.5 million songs through its store, whereas the newly launched Napster had sold 300,000 tracks in the U.S.

Apple has already established a toehold in the U.K. with its iPod music player, which pundits predict will give the Cupertino, Calif., company an edge over Napster out of the gate in the U.K. market.

"Both companies have been rushing to get out on the U.K. market first," Mulligan said. "It had been expected that Apple would launch iTunes in the U.K. in the second quarter, but the third quarter does sound more appealing in that it doesn't compete with the launch of the iPod mini in April and it still gives them plenty of time for the Q4 (fourth quarter) Christmas push."

Regardless of who gets to the U.K. market first, Mulligan warns that both companies will have a difficult time rolling out music subscription services in the rest of Europe. "It's just too damn difficult to launch a pan-European service," he said. "Agreements have to be reached in each country with rights holders and record companies, for example. And there certainly is not the same level of demand in each country."

Mulligan expects to see both Napster and iTunes launched in Germany and Sweden in time for Christmas sales in the fourth quarter, with France most likely following in 2005. European countries such as Italy and Spain, which are less technologically developed than their European neighbors in areas such as Internet broadband, are probably "a way off" for Napster or iTunes services, he said.

Users in the U.K. can expect a huge marketing push from both Napster and Apple. Mulligan believes that Apple will attempt to partner with large non-technology companies as it has done with PepsiCo Inc. in the U.S., while Napster will continue its innovative link-up with universities, as it has with Pennsylvania State University and the University of Rochester, in New York. Roxio is also working hard to make Napster appealing for users by increasing the number of portable audio players onto which users can directly drag-and-drop tracks from the Napster application.

"Apple has established an off-line brand, which Napster hasn't done," Mulligan said. "But there have been some set-backs for Apple, such as the negative press it has received here about the expense and difficulty of replacing the iPod battery."

That issue, as well as issues of interoperability with Windows Media Audio (WMA) from Microsoft Corp., are making some U.K. iPod converts rethink their commitment to Apple.

"Yes, the iPod is a design classic. It looks and feels great," said iPod owner Toby Burton. "But just last week a friend of mine asked for my suggestion on a digital music player and I had to point him to something that uses WMP, because it's more flexible and the batteries on those devices are less of a hassle to replace."

Burton believes that the music services between Napster and iTunes would most likely be similar, so therefore price and convenience would be the deciding factors.

Mulligan also sees convenience and interoperability as key components to the future success of online music services. "Somewhere down the line, there will have to be interoperability between all of the music formats. I think that Napster will be the first to get there as Apple is famous for holding on to its proprietary software and hardware, and at this point, Napster has more ground to make up."

Should Napster offer a service that provided downloadable music in iTunes, WMP and MP3 formats, that would be the deciding factor for iPod owner Burton. "If Napster could do that, I'd dump my iPod when it came time to replace the battery and buy the player from Ministry of Sound," he said. "That player looks nice enough, and what really counts is the 6,000 songs I already have loaded onto my PC, mainly burned from my CD collection, as well as the files I plan to download in the future."

This story, "Napster sets launch date for UK; iTunes plays coy" was originally published by PCWorld.

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