Uncertain Future for Napster
6/3/01



New Internet audience research from Jupiter MMXI puts the ongoing popularity of the Napster phenomenon in doubt. According to the findings, Napsterís proposed move from free-access to a paid-for subscription model could well alienate its current youth market, leading to a dramatic loss in the numbers of its future pay-access users.

Jupiterís research has found that Napsterís announcement of its forthcoming paid-for subscription model appeals to only half of the serviceís European users. Detailed Internet audience measurement across seven key European markets points to two distinctly different types of music-download audiences. One is affluent, older users who are more likely to pay fees for the service, and the other are low income, heavy music consumers who are unlikely to pay online. However, analysis of Napsterís actual current audience shows that users fall into two types. Nearly 50% of users are under the age of 24 whilst the other 50% are found among older and wealthier online groups. Age aside, the Napster audience is overwhelmingly male, with only 23% of women making up the profile. The question being asked then is "Would a fee-paying user fit Napsterís established user type?"

According to Mark Mulligan, Music Analyst with Jupiter MMXI, "Attracting and retaining young people now is crucial for the survival of services like Napster, who need to build strong brand loyalty in the face of a European landscape which we predict will be increasingly competitive in the future. Napster have got it half right with their planned subscription model which will appeal to much of their existing audience. However, to keep the important youth audience they currently attract, Jupiter MMXI believes they should continue to offer a free service, but must make it less appealing, perhaps with lower quality audio, limited content and advertising. This will have little appeal to paying customers, who would benefit from superior quality downloads and a premium service." Much of the future of music-download online may well be out of the hands of Napster though. Jupiter points out that the decision from the Napster court case will probably result in the shutting down of the existing service in its present form. Consequently, many of Napsterís five million or so European users will automatically transfer to other online alternatives, such as Gnutellla. Jupiterís Internet audience measurement survey is based on online panels of 50,000 European users. The full online music research and report will be presented at the companyís forthcoming Plug In Forum scheduled for Barcelona on 2 and 3rd April 2001.