“I just cancelled Rhapsody [after] 2 years,” wrote “Deisel” on one Rhapsody message board. “Let’s get something straight here. IPODS are [the majority] of the market, I am not going out to buy 1 of 5 or 6 MP3 players just to use this service. The Ipod [sic] is a far superior device and meets my needs. I was sold a bill of goods yesterday that THEY COULD NOT DELIVER!”
Currently, only a half dozen or so models of digital music players from manufacturers such as iRiver, Creative Zen, and Gateway support Microsoft’s Windows Media 10 (also known as “Janus”) technology that makes subscription portability programs such as Rhapsody and Napster possible. These models inhabit the less-than 20 percent share of the digital music player market not owned by Apple’s iPod.
Unfortunately for Real and Napster, Microsoft’s Janus technology was mired by delays (it was originally announced in September 2003) and the eventual launch missed many manufacturers’ production deadlines for the holiday season of 2004. Still, many believe Janus-compatible devices are coming, just not as quickly as Real, Napster, and their subscribers would like.
“There’s excitement among vendors for Janus and these services,” says Susan Kevorkian, an analyst with IDC. “But consumers are still confused about the technology and the value proposition, and as a result, manufacturers have been tentative about introducing the new technologies.”
Despite these issues, some signs point to consumers as a whole warming to the concept of subscription services. According to a December 2004 survey by Jupiter Research, 50 percent of 13 to 24 year olds responded that they were interested in subscription services. And while Napster’s To Go service hasn’t lit the world afire, it has contributed to subscriber additions for the company.
In the company’s most recent quarterly earnings announcement, Napster stated that net additional subscribers for the March quarter totaled 143,000, up from 88,000 the previous quarter.
“The only thing they’ve said publicly about their portable program is ‘It’s in the early stages,’” says Gene Munster, an analyst with Piper Jaffray. “That translates to ‘It hasn’t taken off.’ But it’s a growing market and people are just learning about this.”