The Engadget Interview: Chris Gorog, CEO of Napster

[MacBytes]

Category: Tunes
Link: The Engadget Interview: Chris Gorog, CEO of Napster (http://www.macbytes.com/link.php?sid=20050315014646)
Posted on MacBytes.com (http://www.macbytes.com)

Approved by Mudbug

[simX]

Ugh. As much as it's interesting to hear choice quotes from Gorog, it would have been nice if the interviewer had actually asked some tough questions... i.e.: Napster To Go being susceptible to the record-computer-audio workaround is much more damaging to Napster because a person could use the two week trial to get unfettered downloads of an unlimited number of songs, while the same person would have to purchase the track from iTunes first before even being able to record it to an unfettered format using the same hack. How does Gorog explain away this?

Or how about asking why Napster doesn't give reduced prices for being able to burn the songs you download using the Napster subscription service to CD -- you still have to pay the full 99 cents, so if you want to burn your music to CD, Napster's subscription service doesn't offer you any benefit. What does Gorog think about this?

Or how about the fact that Apple introduced the iPod shuffle that IS a flash-based MP3 player, and is poised to start taking over that part of the market too. Why does Gorog completely ignore the iPod shuffle, and the fact that Apple has a quality iPod for virtually every price range?

These questions aren't touched, and would have made the interview a lot better. Unfortunately, Engadget was much more interested in getting the same old responses out of Gorog. Lame.

[OziMac]

I could not agree more simX. Where were the non-gladhandling questions? I have a lot of time for engadget, so I'll just assume that they were exercising journalistic restraint. But this guy should not have been allowed to get away with the ********ting he did about how great/successful Napster is, how Apple's share is declining, how Apple is using a closed system and WMA is open and dominant...

I'm more than happy to admit that Steve Jobs does his fair share of overhyping - but his hype is generally felt more substantively in the excitement surrounding the product he's promoting. This guy is talking from his arse about WMA already being the dominant format fo digital music and Apple not providing users with choice (and nevertheless fading from significance).

[DomArch]

There are so many points he makes that sound good on the surface until you really dig deeper:

- "When you think about it, 15 bucks a month is one CD. So for the price of one CD you can have access to the world’s music catalog, put it on your MP3 player"....how many users out there buy one CD a month? I'm already paying for my cell phone, broadband, cable, etc. etc....how many monthly fees do I want to and can I afford to take on?

-"In fact, we offer an a la carte download service similar to iTunes for 99 cents a track or $9.95 an album."....great. So in addition to the cost of a CD that I'm paying every month, I have to pay for an additional cd to actually own some of the songs? Sounds like a great deal to me.

-"They don’t know in advance that when they buy that device they can’t use Napster or any of our other competitors. So they get trapped in the experience of iTunes."....What? What iPod purchaser doesn't know they can't use Napster. And who cares? Although I'm biased towards iTunes, I don't really see that huge a difference between the various stores out there. What I can't get from iTunes, I can get from a legal MP3 site/blog or go buy the CD and rip it in. OOOOOH I feel trapped in the experience of iTunes!

-"As of Dec. 30, we had 270,000 subscribers. We’ve been growing very rapidly. Our last two successive quarters we increased our subscriber base by over 50 percent."....IMO, that's not so impressive. iTMS may see a billion downloads by the end of the year, and they are selling iPods of all varieties faster then they can make them. At Napsters current rate, next quarter they'll have 405,000 subs and then the next quarter they'll have 600,000....a year will have passed and they won't have reached 1,000,000 subscribers.

I've got to give the guy credit though - it sounds like he truly believes in his product.

[JereIC]

"So it’s really a paradigm shift for people to recognize that the music collections they’ve carried around with them on their back, all of this stuff doesn’t matter anymore." Question 13

Statements like this, and their "Do the Math" campaign, are why I think the folks at Napster are either bitter at the world and/or don't know the first thing about business. If my stuff doesn't matter anymore in the Napster world, I'm going to do my best to stay out of the Napster world, where my stuff continutes to matter, unless Napster offers a vastly superior deal than the current world, which it really doesn't. I think Gorog was trying to sound revolutionary with this, but it just comes out like calling us idiots. I think this question in the comments section perfectly echos my thoughts:

"Do you think it was a bad move in your Super Bowl ad to tell everyone who uses an iPod that they are stupid? Is calling customers idiots really the best way to get them to come to you?" -- Jayson Elliot, Comment 18

Napster still has a long way to go to convince people to use their product.

[Keynoteuser]

Every time he compares people stealing music from Napster and people stealing music from iTunes, he leaves out ONE thing...for $14.95 a month you can steal ALL the music you have time to download and rip in a month. With iTunes, you have to BUY the music before you could rip it, unless you like 30 second song samples.

So, it's NOT the exact same thing. The record companies don't seem to understand this, and neither do the interviewers. I just want to see how much their sales drop after a month or two when all their subscribers have their fill and rip off most of the library...

[pgwalsh]

He says iTunes is not a big deal, it's the iPod. Ha! I know people that don't own an iPod, but love iTunes now extensively use ITMS. It's all about the user expereince and that's where Apple excells.

[Lacero]

I could see how subscription based music service would be better than iTMS if the price were $9.99 monthly and the cost to own a song is 25 cents. iTunes could offer a similar service, and since both services would be susceptible to the audio-out hack, they are on an even playing field. We'll just have to wait and see how the recording industry deals with the Napster-To-Go hack.

[rjwill246]

When I had patients with this type of thinking they were either on hallucinogens or should have been on legally prescribed anti-psychotics. I half expected Elmer Fudd to join in the conversation.

[fpnc]

I'd say that Chris Gorog's comment about Steve Jobs being "frightened" by Napster's "success" is a somewhat radical claim.

I think it is far more likely that Chris Gorog will be truly frightened when he is thrown out on his ear after Napster crashes and burns (I suspect that he was asked to leave Roxio -- that is, he was asked to follow his dream and not risk running Roxio into the ground along with Napster).

It's also odd that Chris Gorog claims that his service is more "open" than iTunes. I'll believe that when Napster and Microsoft's protected WMA are available on both Windows and the Mac. So, I guess you could say that Napster is "open" as long are you are willing to be forced into using a PC running the Windows OS. Meanwhile, iTunes and the iPods work on both PCs and Macs.

As for subscription services, I'd like to see iTunes offer that option. But there is a serious problem with the subscription services (as others have noted -- circumvention of the subscription-based DRM).

Below are some comments I made in another thread on subscription-based services:

"However, I think the real issue here is whether the music industry is going to tolerate the massive opportunity for illegal sharing and copying that subscription-based PC systems allow. If anyone ever breaks the DRM on the subscription-based content then there is going to be a huge backlash from the music companies. Can you imagine if someone found a way to unlock the DRM with one click of the mouse (using a true DRM-breaking utility, not with the analog or real-time methods that already exist). In only a few minutes someone could potentially unlock their entire subscription collection that might consist of literally thousands and thousands of songs. And such a "crack" would only have to happen once (for anyone willing to use it), since the DRM'd content would already be on each user's PC.

For the above reason, I think subscription-based services will eventually be limited to running on dedicated devices (and not on the PC). What will happen is that the DRM content will only be allowed to exist on the non-PC playback device (the DRM will thus be locked into the embedded hardware). Thus in a situation like this your iPod-like device would actually connect directly to the subscription service and the music would never physically reside on your PC's hard disk. Then, the only way to get the music off of the playback device would be though the analog output (headphone/speaker out). In that sense, it would be almost like a programable radio (but be a completely "closed" system as far as digital duplication)."