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This is a RENTAL plan!

I keep getting e-mail asking me what I think, isn't Napster To Go what I've been PRAYING FOR?


Do you think we could sell an improved cassette today?

Actually, Philips tried it. Back in the early nineties. With DCC. It was a COLOSSAL FAILURE, because TECHNOLOGY had moved FORWARD! Who in the HELL wanted tape, at a reduced quality level, when they'd been inured to the DISC, which was essentially indestructible?

Ideas don't exist in a vacuum. TIMING is of the essence.

If Napster To Go had hit the landscape in 1998. BEFORE the original Napster. Hell, before the iPOD! THEN it might have succeeded. But now the concept of renting tracks that you can get for FREE makes NO SENSE!

For free.

Once again, the iTunes Music Store is a COLOSSAL failure.

If you're looking for a CD replacement business that is.

DON'T be confused by the 250 million tracks sold figure that Apple just released. That's now a WORLDWIDE FIGURE! The company FAILED to sell 100 million tracks in a year in the U.S., and now to do this tiny little increment in business, considering you can buy from iTunes in the U.K., Europe, even ASIA, illustrates that this IS NOT what the consumer wants.

There will come a time when music is a service.

But that time is not here now.

That time will come when a VERY YOUNG GENERATION, which was never inured to record collecting, is suddenly able to hear any track it wants whenever it wants. Hell, the same thing is going to happen in MOVIES TOO! But not RIGHT NOW, because the service doesn't exist in music and the price is too high in movies.

Yup, we SHOULD live in a pay per view movie world. God, how many times do you WATCH a movie. But the price per viewing is just too high. You can OWN the damn thing on DVD and watch it WHENEVER you want, WHEREVER you want, for a small multiple of the cost to rent it for 24 hours.

To try and stay ahead, the movie business is going to introduce the HD DVD.

But the record companies can't stay ahead. Because they've ALREADY FALLEN BEHIND!

CDs sound lousy to begin with. There's only one good track. But WORSE, the public wants the file and the file ONLY! YES, some oldsters still want the disc, but is that REALLY a business you want to be in? A DYING business? Hell, Cadillac woke up. The median age of its buyers was over 60! Cadillacs were not COOL! They came out with the Escalade, and they're about to release that hot roadster you saw advertised during the Super Bowl. They want to STAY IN BUSINESS, unlike the major labels.

Yes, the major labels are going out of business. (At least marginalized, which, to them, is almost the same.)

And it's got nothing to do with piracy.

Bottom line, no act worth its salt is going to want TO BE ON a major label soon. They'll only be able to pick from the no-talents and the money-hungry. NEITHER of which have sustained careers. What are the odds of a major breaking a new act? Unless it's hip-hop, almost NIL! And, in the effort to break you you're going to be so overexposed as to be done ANYWAY! No, you want measured exposure. You want to treat your fans right. You want everything that's the OPPOSITE of what the major labels want. Hell, you want a CAREER!

And if you can get the word out on the Web, and get PAID via the Web, the only thing the major label can grant you is overexposure, which will break you and then destroy you. You'll be big and then you'll be done.

Yes, paid via the Net.

I'm constantly hearing indie acts on XM. Their stuff IS NOT available on Rhapsody, the iTunes Music Store or Napster. Which all, except for exclusives, have the same damn material. Because these companies know that the key to staying alive presently is to be in business with the old guard, i.e. the major labels. They've got no INCENTIVE to play with the indies. AND THAT'S WHAT'S WRONG WITH THE SYSTEM! That's why the system must CHANGE! But, no crusade is needed, the KIDS are changing the system as we sit here. Forgoing MTV and radio and getting their tracks via IM!

Yup, you can shut down file-trading, but you CAN'T shut down sending tracks via IM, now the PREFERRED way of conveying material amongst youngsters. Hell, it's built into the AOL SOFTWARE! (And, for the record, you don't have to subscribe to AOL to use AIM, the company's instant messaging software. AND, in case you don't know, AIM is the iPod of IM.)

Then again, you've got to know, have a RELATIONSHIP, with the person sending you the stuff.

So, the key is to build a better mousetrap.

Instead of trying to plug the dam, build a NEW dam, FURTHER UP STREAM!

Yup, EVERYTHING must be available to EVERYBODY. And they must pay for this PRIVILEGE! Everybody at the ISP level, or those who want to trade music must acquire a license. I mean give the people an OPTION! Instead of suing a few, get EVERYBODY to pay ten bucks a month NOT to be sued, to get EVERYTHING THEY WANT!!!

Which is not Napster.

Furthermore, Napster is EXPENSIVE!

Really, think it through. You wind up paying $180 a year and you end up with…NOTHING! Yes, if you don't keep paying the $15 a month, everything you've got EVAPORATES!

OR, you could BUY $180 worth of music from the iTunes Music Store, and have it theoretically FOREVER!

Oh, you won't have it forever, because formats, etc, will change. Which is why we ultimately want to pay to get whatever we want whenever we want. But, with present day technology, knowing you can get it P2P, is JUST LIKE always having it available.

Hell, the public knows all this. Which is WHY THEY'RE TRADING!!


As for Napster…

You DID read that their Super Bowl commercials were the LOWEST RATED of the whole damn event. I mean could you do any WORSE?? Like Apple's supposed to be threatened by your multimillion dollar ad campaign? God, doesn't anybody there know it's about COOL???

But it's not about cool at Napster. Close observers will know that its majordomo got rid of the old Roxio business and is focusing solely on Napster. Which seems dumb, since Napster is such a bad play, but, as Jon Healey of the L.A. "Times" pointed out to me, Roxio's business was DISC-BURNING SOFTWARE! God, that's TRULY done!!!

Don't believe the hype.

Today and tomorrow it's the iPod.

Not forever, but for the foreseeable future.

People are ripping their own CDs, borrowing the CDs of others and downloading P2P. The labels are getting NONE of this money. THEY think they're going to get rich by selling copy protected tracks at the iTMS, hell, they even want to RAISE THE PRICE!

It's the best fake of all time. The best hidden ball trick. The majors can't see the landscape. They're fighting in an arena where there's no war.

The NET has pronounced Napster To Go a rip-off failure.

I haven't bothered to comment on the service because I figured you'd seen the stories.

Then again, I also haven't commented because, like the U.S. Constitution, I've felt that the truth was SELF-EVIDENT!

I hate to quote research. Because methodology can skew the results. But I believe the following is nevertheless definitive:

"For now, the appeal of subscription services appears to be small. In an Internet poll late last year of more than 300 owners of portable music players, research firm Parks Associates asked how many would be willing to pay $10 a month for a music service that included portability. A mere 8% said they would be likely users."

("Wall Street Journal", 2/3/05)

(Just for the record, they're talking about a NAPSTER-STYLE subscription service. Where the tracks EVAPORATE! If you could KEEP THEM, THEN, it's a different story.)

Contact Bob Lefsetz | View Lefsetz Letter Archives

NOTE: The views expressed in this editorial do not necessarily reflect the opinion of CelebrityAccess, Encore or its employees.