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Napster gives away MP3 players

Profits are for losers

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Showing a longing for its dot-com hysteria heritage, Napster has decided to give away MP3 players to people willing to sign up for a year-subscription to its service. Napster managed to coax Rio into lending its name and music players to what can only be seen as a desperate proposal for increasing online music sales. Now subscribers can pay $119.40 for a year's worth of Napster and get the Rio Chiba Sport MP3 player at no extra charge. For an extra $80, consumers can upgrade to the Rio Nitrus player, which has 1.5GB of memory as opposed to the stunning 128MB (What! - Ed) Chiba Sport.

Napster has barely managed to make a dent in the online music market, which itself has done little to impact either piracy or physical CD sales. Its main rival Apple, by contrast, could make close to $1bn in iPod sales this year along with a few pennies from moving close to 70m songs. Since Napster - owned by Roxio - does not have hardware of its own to sell, it clearly decided to try and undercut Apple with a vacuous, dot-com era business model.

Apple's competitors keep promising that online music sales will grow. But this pledge seems hard to believe given what Napster and others are offering. Who wants to rent music? The market has answered this question. Thanks, market.

After a one-year subscription to Napster, you would just have to pony up again to keep listening to the music you have downloaded. $119.40 a year is an awful lot over the course of one's lifetime. But with a business model like this, it's not a human's lifetime that seems apt anyhow. We're thinking hamster. Or maybe a goldfish under your 12-year-old's watch.

Analysts have said that Napster needs to earn around $300m to break even. Roxio believes Napster can pull in $40m in revenue this year. And now you can tack on some hardware losses. You do the math. ®

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