Tuesday, May 19, 2009

Napster cutting prices for music

Napster.com has cut the price of its online music streaming service to $5 a month from $12.95, and threw in five song downloads for customers in a move to better compete with rival iTunes.

The company gained notoriety in the early years of music downloading with its free music swapping service, but following copyright lawsuits emerged as a subscription-based service. It has struggled to grow its user base from over 700,000 last August, and compete with music retailers like Apple's iTunes store.

Napster said the new offering stands up well against iTunes because 5 songs a month will cost just $5 even if they are new releases. By comparison, iTunes recently began charging up to $1.29 for newer, more popular tracks. Napster also allows unlimited full-length song previews versus iTunes' 30-second samples. Subscribers can also buy additional MP3-format songs priced between 69 cents and $1.29.

Sites such as MySpace, Pandora and imeem pay for song streams with advertising revenue so don;t charge for the music, but Napster does not have any ads.

The plan will be marketed through Best Buy stores starting today including with pre-paid cards that will cost from $5 for one month to up to $60 for a 12-month subscription. Online buyers of lengthier subscriptions will get a few extra song download credits thrown in.

Users of Napster's existing $12.95-per-month computer-based music streaming service will be switched over automatically on their next billing cycle.

Others who pay $14.95 a month to be able to download unlimited numbers of songs and play them from portable devices, will be given a choice to stick with their plan or switch to the new plan. Subscribers who pay $7.49 to have five over-the-air song downloads to mobile phones will not be affected. (info from The Associated Press)

No comments: