HITS Daily Double
"I’ve used Napster 2.0 and it’s
really great."
——Shawn Fanning


iTunes for Windows, Napster 2.0 Up the Ante for Paid Downloads
A couple of high-profile download stores are about to open up for PC users, and the advent of these new for-pay options has at least temporarily lifted the sagging spirits of the music industry.

On second thought, let’s just say it’s a welcome distraction from the general mood of full-bore freakout.

Apple, which electrified the biz, in a digital sort of way, with the initial rollout of its iTunes Music Store for Mac users earlier this year, is expected to announce the grand opening of the Windows version of the per-track download outlet.

Indeed, though Apple has been coy about the purpose of this Thursday’s (10/16) San Francisco event to which journalists (and hacks like us) were invited, the invitations do say, "The year’s biggest music story is about to get even bigger." You can draw your own conclusions. TV ads for the iTunes store, meanwhile, are already reaching out to PC users.

Apple got more good news with a recent report from Needham analyst Charles Wolf claiming that the company could sell $600 million worth of tracks annually. Though its profit on downloads would be marginal, Wolf reasoned—due to profit splits, royalties, credit card transactions and bandwidth—the store’s popularity would lead to continued growth for Apple’s market-leading portable digital-music player, the iPod.

Indeed, one estimate says iPod sales jumped from about 78,000 in Q1 to 303,000 in Q2, thanks to the marketing of the iTunes store. Whatever the reason, Apple stock continued to move north this week, closing at 24.35 on 10/13. Share prices were below 13.00 in April.

But unlike the insular (and comparatively tiny) Mac market, this playground is not the exclusive territory of Steve Jobs. While digital-song vendors like BuyMusic.com and MusicMatch have already set up shop in the PC universe, industry eyes are currently very much on another potential competitor.

Napster 2.0 may be a far cry from the file-swapping trailblazer that cut the record biz off at the knees, but the copyright-friendly, versatile platform—set to bow online on Oct. 29, commemorated with a rockin’ blowout at L.A.’s House of Blues—has already earned plaudits from insiders, and is proof that some kitties really do have multiple lives.

Like the iTunes Store, Napster will sell tracks for 99 cents and albums for $9.99. A special promotion awards five free tracks to music fans who "pre-register" on Napster.com. A subscription version will also be available at $9.95 per month.

The brand is now owned by Roxio, which has rolled its various assets into the offering. These include a proprietary CD-burning software and file management, portable devices co-branded with Samsung, the licensed content of former major-label-owned (Sony and UMG) JV music service pressplay (which brings a trove of exclusive, in-house recordings), Napster community features and more, brought into a whole that may be greater than the sum of its parts.

The new Napster will also come with its own online magazine (Fuzz), video clips, streamed song samples, recommendation features, chart data and a nosehair trimmer.

"I’ve used Napster 2.0 and it’s really great," says Napster founder Shawn Fanning, who was hired as an "advisor" to the Kitty’s new incarnation. Shawn also thinks it’s great that music on the new Napster isn’t free, because now he gets paid instead of sued.

Roxio stock has also surged of late, hitting a year high this month.

Can these trailblazing services beat the scourge of free swapcos? Only time will tell. In the meantime, music continues to be available for sale on shiny, round pieces of plastic.