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Napster Pre-Paid Cards
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I think this is a great idea and hope that Apple copies this idea.
Apple would make a really cool card that looked like a real credit card so all kids would show them off.
Okay everyone who thinks these cards are a good idea send Apple an e-mail--please?
Apple would make a really cool card that looked like a real credit card so all kids would show them off.
Okay everyone who thinks these cards are a good idea send Apple an e-mail--please?
This is exactly what I said Apple should do on this board about 4 or 5 months ago was sell cards like a prepaid phone card or gift card inside their stores and other stores that carry Apple product so that they can hit people who don't have credit cards. It's a great little gift, do something like $10, $20 and $50 cards for sale, but they have been to slow to move on this one. Oh well hopefully they'll get with it before Christmas which is sure to be the time that the sales for it would be ideal.
Re: only problem I see
But these could be sold at Apple's online store or in their brick and mortar stores. Don't you need ITMS to buy the gift certificates now? If your relative doesn't have a computer or an OS that runs ITMS, then this would be another viable option.
But these could be sold at Apple's online store or in their brick and mortar stores. Don't you need ITMS to buy the gift certificates now? If your relative doesn't have a computer or an OS that runs ITMS, then this would be another viable option.
You're right and wrong... Yes they are giving away 100 million songs with Pepsi products, but this won't start until the Superbowl in February. That would completely miss the holiday season, and Napster would entrench themselves in the pre-paid purchase card for music channel. As awesome as the Apple/Pepsi deal is, it isn't out now and won't be for four more months.
Re: I don't know
You are slightly missing the point. For one, it's aimed at those who don't have credit cards. Two, it's a great impulse item. Three, one reason music downloads have become so popular (aside from being 'free' via piracy) is because people don't want to pay $15 to buy a CD when all they want is ONE song.
So yes, you could go to a store and drop $15 on a CD that has 1 good song and 14 pieces of crap. Or you could go get a prepaid card for $15 and download 15 songs you actually want. It is a little counter-productive to go to a store specifically to buy a card to go home and buy something, but if you had a credit card you would just buy it online and this whole discussion would be meaningless.
Regardless, it's all about giving consumers choice. You may think it's dumb, but obviously a lot of other people don't. By not doing something similar, Apple would be limiting their potential consumer base. There is a large segment of the populace who buys pre-paids cards. Cell phone minutes, long distance, gasoline, regular merchandise, food cards, etc. People eat them up.
You are slightly missing the point. For one, it's aimed at those who don't have credit cards. Two, it's a great impulse item. Three, one reason music downloads have become so popular (aside from being 'free' via piracy) is because people don't want to pay $15 to buy a CD when all they want is ONE song.
So yes, you could go to a store and drop $15 on a CD that has 1 good song and 14 pieces of crap. Or you could go get a prepaid card for $15 and download 15 songs you actually want. It is a little counter-productive to go to a store specifically to buy a card to go home and buy something, but if you had a credit card you would just buy it online and this whole discussion would be meaningless.
Regardless, it's all about giving consumers choice. You may think it's dumb, but obviously a lot of other people don't. By not doing something similar, Apple would be limiting their potential consumer base. There is a large segment of the populace who buys pre-paids cards. Cell phone minutes, long distance, gasoline, regular merchandise, food cards, etc. People eat them up.
Here's the problem with this...
Retailers want to make money on what they sell.
Which means, they NEED to have a good profit on these items. Brick and mortar stores have a lot of overhead, they need a serious mark-up on products just to survive. Let's take, for example, a discount record store seller (Best By, Circuit City, Wal-Mart), etc.
These guys are currently making about 40 points on their items (40 percent mark up). The only way they are going to put these cards in their stores (cards that will reduce the number of physical album sales) is if they get some good markup on them.
Let's say Napster is able to convince the store to do it at a discounted rate of 30 percent markup (doubtful). That means that Napster discounting their product 30 percent to the reseller, and are only getting 70 cents on the dollar for songs.
If what we have heard is correct, if the music companies are getting 80-90 percent of the revenue, then Napster will lose money on every single song they sell.
That may work for a while, as a loss leader kind of thing, but there is no way it will be a long term solution.
People do not open a business to lose money.
Retailers want to make money on what they sell.
Which means, they NEED to have a good profit on these items. Brick and mortar stores have a lot of overhead, they need a serious mark-up on products just to survive. Let's take, for example, a discount record store seller (Best By, Circuit City, Wal-Mart), etc.
These guys are currently making about 40 points on their items (40 percent mark up). The only way they are going to put these cards in their stores (cards that will reduce the number of physical album sales) is if they get some good markup on them.
Let's say Napster is able to convince the store to do it at a discounted rate of 30 percent markup (doubtful). That means that Napster discounting their product 30 percent to the reseller, and are only getting 70 cents on the dollar for songs.
If what we have heard is correct, if the music companies are getting 80-90 percent of the revenue, then Napster will lose money on every single song they sell.
That may work for a while, as a loss leader kind of thing, but there is no way it will be a long term solution.
People do not open a business to lose money.
They also want to keep it within the US.
Hey, making money aside, I think there are some licensing issues here too.
No one from outside the US can buy songs on iTMS. In fact, no one from inside the US can either if they don't have a US credit card and billing address - a problem that grates with me right now during my visit.
By making prepaid cards available at bricks and mortar stores, Apple would allow non US consumers indirect access to the iTMS. As it is, they can't buy the gift certificates or allowances since they are located or have credit cards outside the US. Thus I guess Apple maintains its liberal DRM policy within the US without compromising it by allowing people outside the US to have the same access rights (obviously part of the current deal with the labels - harsh, but fair enough from their busines spoint of view).
On a similar note, I read somewhere that you can buy prepaid credit cards from 7-11 and use them on iTMS - anyone tried this with any success?
Hey, making money aside, I think there are some licensing issues here too.
No one from outside the US can buy songs on iTMS. In fact, no one from inside the US can either if they don't have a US credit card and billing address - a problem that grates with me right now during my visit.
By making prepaid cards available at bricks and mortar stores, Apple would allow non US consumers indirect access to the iTMS. As it is, they can't buy the gift certificates or allowances since they are located or have credit cards outside the US. Thus I guess Apple maintains its liberal DRM policy within the US without compromising it by allowing people outside the US to have the same access rights (obviously part of the current deal with the labels - harsh, but fair enough from their busines spoint of view).
On a similar note, I read somewhere that you can buy prepaid credit cards from 7-11 and use them on iTMS - anyone tried this with any success?
i agree with most of you that apple should adopt something similar. this is a good idea.
however, there's one difference if apple copies this... iTMS is already an established business. (or as "established" as there is in the online music business)
napster service is yet to start. whether intentional or not, i'm glad apple has waited until they have some credibility to their service before expanding - like their "allowance" system or gift certificates.
where's buymusic.com now? those tommy lee ads look rather comical nowadays, no? i'm not saying napster will go the same route (i.e. not very successful) but i find it rather shady and tricky that they are selling prepaids before the service is even up. kinda cheap way to start a business if you ask me...
edit: ok, i read the article wrong. i guess it's not available until two weeks or so after the launch. still, that's far from firm establishment... let's see if how many songs they will sell by mid-Nov. my guess is that it will not be millions like iTMS. (just like buymusic.com - which, AFAIK, hasn't made any announcements about the number of songs they have sold, probably meaning they've sold very little.)
however, there's one difference if apple copies this... iTMS is already an established business. (or as "established" as there is in the online music business)
napster service is yet to start. whether intentional or not, i'm glad apple has waited until they have some credibility to their service before expanding - like their "allowance" system or gift certificates.
where's buymusic.com now? those tommy lee ads look rather comical nowadays, no? i'm not saying napster will go the same route (i.e. not very successful) but i find it rather shady and tricky that they are selling prepaids before the service is even up. kinda cheap way to start a business if you ask me...
edit: ok, i read the article wrong. i guess it's not available until two weeks or so after the launch. still, that's far from firm establishment... let's see if how many songs they will sell by mid-Nov. my guess is that it will not be millions like iTMS. (just like buymusic.com - which, AFAIK, hasn't made any announcements about the number of songs they have sold, probably meaning they've sold very little.)
The "granny factor" is a bit over-estimated in my opinion. Granny isn't going to have a clue what the heck this type of gift certificate is going to be used to buy. Granny is more likely to just get a Gift Certificate to Best Buy than a Napster Gift Certificate.
This sort of thing at a gas station / grocery store makes a lot more sense to me as an impulse buy by kids who know.
All in all, I like the concept; I'm curious about the economics of it.
This sort of thing at a gas station / grocery store makes a lot more sense to me as an impulse buy by kids who know.
All in all, I like the concept; I'm curious about the economics of it.
I don't know how anybody can feel negatively about this. Just because another company came up with something before Apple doesn't mean it's bad. Prepaid cards are very appealing to kids. If I had no credit card what else am I going to do? These cards wouldn't be in music stores so I don't know why people are commenting on the stupidity of it. Having them in grocery shops makes it a great impulse buy. As for the stores getting a cut, I don't know how it works right now, but at my Safeway back home, I can already buy gift certificate cards for Nordstroms and other department stores.
The cards are also a form of advertising for people such as myself who don't watch TV. Not that the iPod commercials promote the ITMS right now.
The cards are also a form of advertising for people such as myself who don't watch TV. Not that the iPod commercials promote the ITMS right now.
The idea is nice one but if your at CD store why buy cert. to a virtual one? Maybe if it is a Apple store or one of the other major chains they are selling through.
To me if folks have iTunes already they can make cert. now and just send them online cheaper and faster normally.
I think it be good idea if they keep it just to Apple and computer related stores only because as soon as you put it in with norm. CD store that just misses the point with me.
To me if folks have iTunes already they can make cert. now and just send them online cheaper and faster normally.
I think it be good idea if they keep it just to Apple and computer related stores only because as soon as you put it in with norm. CD store that just misses the point with me.
Ok, read all the posts before you post something please.
I will say it again: The cards are not designed to be sold at a record store! I don't know why people keep saying that if you're at a record store why would you buy this. Who said anything about having them at record stores? They talked about electronics stores and grocery stores, which are a great idea. I love Apple, but that doesn't mean we can't congratulate another service on a good idea. You all seem to forget that competition is a fantastic thing, because it makes both sides work harder to improve.
And as for them starting to sell these cards too early: sorry, but your not looking at the big picture. How often do you get free advertisement for something on the internet by having something available for sale in a physical store? So far, the only way people for Windows know that there's both an iTunes for Windows or the iTunes music store for windows, is from being online or if they happened to be told by a friend or someone in an Apple store. That's not a that much exposure. There are tv ads for the iPod, but once again, that sends them either online or to a store, which is where they'd have to go to learn about iTunes.
Having these cards in all these different stores does two things: it gives them money from people purchasing them, and it gives them exposure. Assuming that these cards will be hung in the checkout lane, most people scan those lanes for last minute impulse purchases, or while they're waiting for someone in front of them to count out $5 in pennies. They'll notice the cards. And even if they don't buy them, Napster has now succeeded in letting people know they exist.
Cards? Why not?!?!? I can see the points made by many about the "bottom line" and losing money by selling these cards. But, i also have to agree with the idea that advertising is worth whatever cost. Work in retail long enough and you do odd things like selling for a loss to gain customers or just get them into the damn store! It'd be ideal to have the cards right next to the iPod. Or have a giant Yao Ming holding some in his hands with an ipod in the other. Retailers would gladly sell them if there is a chance of selling an ipod too. Also something practical like a solar clock built into the card would be great for justification of the purchase. Make it "look" like an ipod.
Make no mistake though the Pepsi/Apple deal is an absolute blockbuster. If Napster were to become "entrenched" (which it won't that quickly) then 100 million free songs and free advertising on countless 20 oz bottles in high schools and colleges across the us will quickly untrench it. In my later years of high school we had to watch a show every morning called "channel one" news. Its like a hip daily news program that is now in more schools then not. guess who sponsors it and even bought the tvs for all the schools to show it? Pepsi. Who passed out "free" bookcovers to all the students? Pepsi. What vending machines and advertisements were in the cafeteria and gymnasium? Fill in the blank _____.
Make no mistake though the Pepsi/Apple deal is an absolute blockbuster. If Napster were to become "entrenched" (which it won't that quickly) then 100 million free songs and free advertising on countless 20 oz bottles in high schools and colleges across the us will quickly untrench it. In my later years of high school we had to watch a show every morning called "channel one" news. Its like a hip daily news program that is now in more schools then not. guess who sponsors it and even bought the tvs for all the schools to show it? Pepsi. Who passed out "free" bookcovers to all the students? Pepsi. What vending machines and advertisements were in the cafeteria and gymnasium? Fill in the blank _____.
jayscheuerle
macrumors 68020
Yeah, but you get that ecological guilt trip about dumping that nasty stuff into the sewer system and needing to recycle the plastic just to get a chance to win something worth a dollar. And how much do you have to spend on one of these sucrose conveyors in order to get this chance?
The musical equivalent of a phone card is a great idea. kudos.
What would be a good idea (and maybe you can do this with the Napster cards) is to allow them to be re-filled. So you only need one card and you can head to your local store and re-fill your card.
Furthermore, why not a Vending Machine type of system - similar to phone cards?
Furthermore, why not a Vending Machine type of system - similar to phone cards?
It's a great idea and Apple needs to jump on and start doing this now.
Reasons it will be popular and work:
a. not everyone has a credit card
b. you might not want an entire cd just a few or one song
c. you don't have to buy immediately you can wait or buy at your convenience and that's what it's all about convenience.
Reasons it will be popular and work:
a. not everyone has a credit card
b. you might not want an entire cd just a few or one song
c. you don't have to buy immediately you can wait or buy at your convenience and that's what it's all about convenience.
Why so many negative votes for this thread, what a great idea, and I hope apple steals it from napster, so I can get them as birthday presents (i know there is a gift certificate but what if I don't know the users email address or I want to give them to a group of people)
Totally off topic, but I think it's funny that Napster (Roxio) has chosen the anniversary of the 1929 Stock Market collapse to launch their business. I hope they aren't superstitious. 
This IS a good idea
The beauty of gift certificates/pre-paid cards is that you get people's money upfront. You will be surprised how many gift certificates are not redeemed. That is why gift certs are everywhere. It's free money. Also, I think regular Joe consumer is very wired to the idea that gift certificates online AND in physical locations. The key is for Apple to implement these cards and get the word out. Remember taht gift certificate/gift cards (a lá Home Depot) are worthless until they are rung up at the register. Places like Target, WalMart and BestBuy lose nothing but very slim display case if the cards don't sell. And, when they do, even if their profit margin is small, it's revenue they did not have before.
The beauty of gift certificates/pre-paid cards is that you get people's money upfront. You will be surprised how many gift certificates are not redeemed. That is why gift certs are everywhere. It's free money. Also, I think regular Joe consumer is very wired to the idea that gift certificates online AND in physical locations. The key is for Apple to implement these cards and get the word out. Remember taht gift certificate/gift cards (a lá Home Depot) are worthless until they are rung up at the register. Places like Target, WalMart and BestBuy lose nothing but very slim display case if the cards don't sell. And, when they do, even if their profit margin is small, it's revenue they did not have before.