Archive of UserLand's first discussion group, started October 5, 1998.

Re: Napster meeting today

Author:Hussein Kanji
Posted:6/20/2000; 10:52:51 AM
Topic:Napster meeting today
Msg #:17961 (In response to 17927)
Prev/Next:17960 / 17962

Several questions for Eddie and the folks at Napster. If you find any of these important enough, it would be great if you could bring them up and see what they have to say.

1. What's Napster's vision for peer-peer networks?
You can see peer-peer software doing much more than just music. GNUtella already handles music, videos, games (pirated of course, and in zips, etc. Apple way back when had file sharing on its Macintoshes which essentially created a peer-peer network but lacked the easily searchable interface. What's Napster's role in this? How do they see themselves on the historical timeline and how do they see themselves evolving? Is their main vision just to be an MP3 company or is their main vision to technically, or otherwise, enable peer-peer networks?

2. Becoming a record label.
If Napster is in the music business and is the current online leader, it makes sense that they might want to grow the music side of the business. A logical next step might actually be to become a record label and take on its tasks. Record labels are great (maybe not financially) for up and coming artists. But most established artists don't need the same marketing and distribution push that labels provide. The Artist Formerly Known as Prince is an example here, albeit a bad one, because he left Arista and has been on his own for the greater part of the last decade. He's even released new songs although most of us haven't seen them since they haven't been pushed to us.
However, I can see Napster growing the label side of its business, maybe even hiring some of the same people the labels do, and signing up the later-stage artists on terms that are good enough. In return, I can see Napster modifying its software so perhaps they could push certain kinds of music to you (dialog box: I see you listen to old 80's hip-hop, why don't you try Chuck D's new release which just came out last night?). Established artists who've gone independent are looking for someone who can help them distribute - and most feel the Internet is great - and who won't steal from them the same way record companies do. This is a great opportunity for Napster to take charge - sign them up, service them (perhaps by building fan pages, etc and integrating it into Napster), distribute their content (push their new stuff by building it into the client) and hopefully making money for both parties at the end of the day.

3. Monthly access
What does Napster think about monthly access? The phone companies used to charge you a flat usage fee and add further charges for every time you used the line. The cable company charges you a flat fee. Water and electricity comes on a flat/usage fee every month. Why not Napster and your music supply? Could Napster, even theoretically, charge you $10/month and a dime for every song you download, and reimburse you a nickel for every song that someone downloads from you? Is that a good way to go? For the company? For the musicians? For the consumers?

4. Becoming defensible
Napster is an IDEA. It's a baby technology - no more complicated than setting up a web page. If you want proof of this, just turn to the abundant oversupply of Napster clones, most of who do a much better job than Napster (Scour, GNUtella, Freebase, etc), in performance, interface and general usability, and shipping new versions.
But EBay was also just an idea. Somehow, we now think of EBay as a company now that is fully defensible because of all of its participants. But early on, when EBay was still small and person-person auctions were still emerging, and EBay frequently went down, it wouldn't have been hard to imagine how another company could have taken over. Even one of the bigger players like Onsale could have done it. But it didn't. EBay built something that was defensible atop a trivial idea. It made sure that switching costs were high and customers would continue to use EBay. It claims it did this by instilling a sense of community, by having peer ratings and by growing an ad-hoc community around its members.
The question now is what can Napster do to make itself defensible and keep switching costs high? For starters, they could make the part of their product that organizes and displays your music much more robust, so you stay in the Napster interface to the world all the time as opposed to firing up Windows Explorer and WinAmp. Have they thought about defensibility and switching costs? What have they got up their sleeves?

Some may find it unfortunate, but I think most of the real questions around Napster are business and strategy related. The technology, as we might all agree with, is the easy part. I know Dave is meeting with their VP of Engineering who must be a technology specialist in the company. So I'm hoping he's a sharp guy who's thought about some of this stuff.

On a side note, I'm actually really surprised Napster hasn't hired more business folks (either from the Valley or Hollywood, or from the various business schools with experience in the music biz). BTW, are they hiring strategy folks?

Hussein

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