I find myself still thinking about Napster to Go, so much so that I wonder if I'm going to sign up soon. (It would be nice to have on our trip to Europe next week.) Obviously, combining the portability of iTunes with the streaming catalog of Rhapsody is a powerful market step. Everyone's focused on how this service matches up head-to-head with iTunes's pay-per-download model. But it also raises the question of whether it has rendered irrelevant formats with less consumer control, such as Internet or satellite radio.

At the core of Napster To Go is the notion that the consumer doesn't own the content, but merely rents it. Young people today have a concept of lengthy rentals; NetFlix lets you keep a movie as long as you want (you have to send it back to get another one, of course) and Blockbuster just got rid of late fees. With this service, you rent Napster's entire catalog for as long as you pay $15 per month.

There's another analogy to this -- TiVo. I have been a subscriber for 5 years and get it free because I bought a lifetime membership, but some pay a monthly fee not unlike Napster To Go. With TiVo, you can record shows when you like and play them when you like, and even hold on to them for awhile if you're willing to use the hard drive space (I have a machine built in 1999 with a diminutive hard drive so I don't have a lot of room for such luxuries; a standard ritual of mine is working through Now Showing and hitting Delete). This isn't just time-shifting -- with hundreds of digital channels, one can create in their Now Showing directory a list of video offerings not unlike the playlist a Napster subscriber assembles. Plus, TiVo is now also mobile, having launched TiVoToGo (however, they've officially gone too cute with all those upper-case letters).

As I've mentioned before, I love Internet radio because it gives me so much more variety for blues than terrestrial radio, where the offerings are, well, there are no blues offerings. However, even with all those stations, I don't control the playlist. Satellite radio is hot, and XM has come out with its own portable device (Sirius has one in development). I can listen to blues on those services, too, but again I don't control the playlist.

Consumers, I believe, like control. I know I do. I believe outgoing FCC Chairman Michael Powell does too (control at home over his devices and content, I mean) and that's why he called TiVo "God's Machine." So that would suggest the demise of Internet and satellite radio, and the triumph of streaming services such as Napster and Rhapsody (the latter isn't yet portable, but I have nice speakers on my computer that I purchased to listen to Internet radio, and I could listen to Rhapsody music on them with higher fidelity).

Napster To Go might suggest their demise, but I think it's far from inevitable. This digital content market obviously is nascent, but I think there's room for both of the models above. Here's why. The primary reason I'm hesitant to jump into Napster To Go is actually one of its selling points -- thousands of songs. That's an overwhelming selection. How do I pare that down to a playlist? Even if the MP3 player I attach to the service holds that many songs, do I want to hear all of them? Now I'm back to looking at a playlist I don't control. I don't have time to listen to all of those songs and decide which ones I like. So maybe I listen to an Internet blues station, rely on that DJ's knowledge of good tracks, and then add those tracks to my Napster playlist. Hmm, looks like they're complementary services.

posted by Patrick Ross @ 10:27 AM | Markets: Business, Investment & Innovation

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