Digital-music download and subscription service Napster became the first service of its kind to open its virtual doors in Europe, handing key rival Apple iTunes Music Store an embarrassing defeat. Roxio, Napster's owner, announced late yesterday that its service will go live today in the UK, giving customers there their first peek at services the United States has enjoyed for several months. Europeans have had access to other exclusive music services for some time now, however, including On Demand Distribution (OD2), which sells songs through partners such as MSN Music Club and HMV Digital Downloads.
"The UK is a $2 billion music market," Roxio Chairman and CEO Chris Gorog said. "It's the third largest in the world. It's a very important market for us." More important, perhaps, is the lead time Napster now enjoys. The iTunes Music Store was able to drum up a lot of momentum during the 6 month lead time it had in the United States last year. In Europe, at least, time is on Napster's side.
But Napster will have more help as it takes the fight against the iTunes Music Store global. Apple Computer's European presence is more subdued than its US presence, and the company's computer products have even less market share in Europe than they do in the United States. And thanks to the company's supply problems with the Apple iPod Mini, European customers are still waiting for a chance to order the hard-to-find devices, whereas many Napster-compatible portable devices are widely available there.
Meanwhile, contract-negotiation problems with the five major music companies are holding up Napster and iTunes Music Store rollouts in other European countries. Gorog said that he hopes the UK launch will help alleviate concerns. "We'll be looking to move into one or more European territories by the end of the year," he said. "The faster we can roll out across Europe, the faster we can achieve cash break-even."
In related news, Apple announced this week that it will split the company, operationally, into two parts, separating the people who develop iPod-related products from those who work on the company's flailing Macintosh computers. The move corroborates opinions, including that of yours truly, that Apple is slowly shedding its computer-maker roots to concentrate on consumer electronics, and the company is expected to make a series of consumer-electronics-related announcements next month at an annual developer show. Furthermore, Apple's Chief Software Technical Officer Avie Tevanian revealed last week that the company can't afford to keep up its Mac OS X development pace and will scale back those efforts. Presumably, the high-margin iPods and the popular iTunes Music Store service have given company a bigger Return on Investment (ROI) than slogging it out with Microsoft in an unwinnable OS battle.
End of Article
Just to clarify, in Great Britain we've had access to download services powered by OD2 for over a year now. Such services have certainly not been half-measures either, offering the same sort of services as iTunes & Napster for a "similar" price (0.99GBP downloads which obviously isn't anywhere near $0.99)
To put this into perspective, the OD2 powered MyCokeMusic site offers 400,000 tracks including mainstream and chart music, and OD2s other stores (Including MSN) offer similar services - there's been no need for any feelings of impatience!
It's also worth pointing out that OD2 slashed their prices this morning by 50% to compete with the rivals from the US now entering the european market - all good news :)
Mark Lomas May 20, 2004
"Flailing"? with G5's driving the highest value super computers in the world and soon to leap frog anything Intel has? And regarding the MacOS development... so they complete and ship Longhorn killing features years ahead of MS? I read MS cancelling and changing the feature set, or requiring insane hardware to do what Apple has already? Come on.. get a grip on reality?
Editor's note: No offense, but the G5 has been an unqualified sales disaster. --Paul
Rodger May 20, 2004
Your article, assumptions & conclusions are light and silly. You don't really know the Mac at all to make such statements. You just think you do. Apple's pushing the envelope all around, with Panther, Tiger, Xserve, Xserve RAID, FCP, Laptops, G5s, you name it. You should be more worried about Microsoft not being able to come up with ANY OS in the next few years than Apple trying to catch its breath from too much OS development on top of everything else. In three years, it went from a beta to Panther, from no iPod to NO 1, from no iApps to iLife and Garabgeband, the Music Store, and the list can be longer than your little essay even. As for Napster, expect it to go right back to the same place in Europe that it has in the US music scene once Apple releases the Music Store in Europe. As for iPod, it will be much more than it is. That's why it got its own house. Have you uninstalled MSFT Java yet?
Baiting Mac users is not a good way to drive traffic to your site.
Editor's note: I don't give a rat's petoot if "Mac users" read this site. This site is for the people who use computers, and it's honest about all topics, whether they're holy to you or not. --Paul
Zanny May 20, 2004
I wouldn't rule out the iPod mini just yet. It's a good thing Apple couldn't get it there in time: it means demand is too high in the U.S. Lets come back to the mini issue in August, once we know how it's is doing in Europe. You also failed to mention that Napster is charging £1.09 ($1.93) for each song, while the other European services, which can run on the same devices, charge an average of 50 pence (89¢). Pricing is not on their side.
On the operating system front, would you really expect one OS/year to be a sustainable rate? Tevanian said nothing about slowing down the pace of development, simply the pace of release. Finally, they're doing much better than Microsoft. It will end up taking them 5+ years between releases of Windows, and they're 50 times the size of Apple. And to top it off, they're cutting features left and right to meet the schedule (WinFS anyone?).
Kenneth Lay May 20, 2004
Yup, we all know how being first to market is an instant forumua for success. Look how great it worked for Napster! Oh wait, I guess it didn't. And they're now a raging success in the US after their second introduction. Oh wait, they aren't.
It'll be fun to see the reverse of the Apple effect; let Napster jump into the market, screw up, and then watch Apple swoop in and do it properly, just like they did in the US.
As for other "news" we see the typical Thurrott practice of stitching together two totally unrelated pieces of information, no doubt to continue to feed his deep hatred of anything Apple, and come up with a bogus conclusion.
Some may view splitting into two operation units as a prudent move to help each product line maintain focus and become as successful as possible. Or in Thurrott fantasy land, this action is a signal to validates his irrational desire to see Apple no longer making computer hardware.
Here's more creative Thurrott interpretation. Avie was quoted as saying "We're slowing that (pace) down a little bit...because that's not a sustainable rate. But you'll still see us go really fast." Note that he NEVER said they couldn't afford to keep up the pace. But again, in Thurrot's special little world, this creative mangling of Avie's statement helps validate Paul's fantasy that OS X is somehow being slowed due to relative ROI issues.
Reality Check May 20, 2004
So can microshaft "afford" to get longhorn out in the next year? How about within three years? No - because no matter how much money they throw at it, they still can't meet their own deadlines. OSX development is slowing because apple don't feel the need to be more than 10 years ahead of microsoft on OS technology.
thurrott blows May 20, 2004
<i>Digital-music download and subscription service Napster became the first service of its kind to open its virtual doors in Europe, handing key rival Apple iTunes Music Store an embarrassing defeat. Roxio, Napster's owner, announced late yesterday that its service will go live today in the UK, giving customers there their first peek at services the United States has enjoyed for several months.</i><br><br>
Oh wow. I bet Apple are wetting their proverbials.<br><br>
<i>Europeans have had access to other exclusive music services for some time now, however, including On Demand Distribution (OD2), which sells songs through partners such as MSN Music Club and HMV Digital Downloads.</i><br><br>
Do you know anyone who has even heard of these music services? I don't. People in the UK buy CDs and nothing else. You know, those round silver things that the music industry blames for piracy.<br><br>
Sorry Paul, but the desperation is pretty evident in this article, especially the last paragraph.
David May 20, 2004
I thought that Internet Nexus only linked to real news sites. Why did I arrive here?
Dazed and Confused May 20, 2004
Apple's decision to reduce the rate at which it releases OS X upgrades is not as Paul suggests because the 'company can't afford to' but rather that Apple now has an OS that is at least a generation ahead of the competition. OS X was released at around the same time Microsoft released Windows XP (by far Microsoft's best stab at a modern OS incidentally) and since then Apple developers have been active innovating resulting in the release of 3 significant upgrades to OS X in the intervening years and a preview of the next major upgrade, dubbed 'Tiger', will be given at the Apple World Wide Developers Conference ( http://developer.apple.com/wwdc/ ) in July - during this same period Microsoft has been forced to dedicate its resources to attempting to shore up its existing legacy operating systems. At the recent WinHEC 2004 Microsoft demonstrated what currently exists of Longhorn - of the features shown the vast majority are already available now in OS X - I think it's clear Microsoft understands how good an operating system OS X is even if Paul doesn't.
As for the creation of a separate division within Apple dedicated to the iPod this is nothing more than sensible business practice given the success the iPod is proving to be.
For a different take on Apple Chief Software Technology Officer Avie Tevanian's comments regarding the OS X development cycle try this article at CNET: http://news.com.com/2100-1045_3-5215281.html?tag=nefd.hed
Thanks, Alex
Alex Baker May 20, 2004
Current:
$2950 x 12 = $35,400 / year
More anti-mac bias. Calling the Mac "flailing" while it's growing year-over-year sales is far from honest, objective reporting. True it's growing slower than the PC market overall, but its userbase is growing, not shrinking(which would make "flailing" a more reasonable label). Furthermore, Mr. Tevanian did not say the company "can't afford to keep up its Mac OS X development pace". The company certainly can finance the same rate of developement that it has throughout the past 5 years, given its increased revenue and profit. Clearly Apple's astonishing yearly upgrade cycle has rapidly brought their new OS up to and beyond the competition, but such a cycle is hard for developers and IT shops to keep up with. A slower refresh cycle will benefit all involved and is by no means a representation of reduced capability or focus. This is obviously the choice they are making for the good of these groups.
If long OS refresh cycles are a sign of poor support and diminishing interest, what does that say about the gap between XP and Longhorn? You're choice to twist Avie's intentions are clearly aimed at proving your own theory, not reporting the facts. How Michael Moore of you. Frankly I'm getting dizzy from all the spin.
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Such services have certainly not been half-measures either, offering the same sort of services as iTunes & Napster for a "similar" price (0.99GBP downloads which obviously isn't anywhere near $0.99)
To put this into perspective, the OD2 powered MyCokeMusic site offers 400,000 tracks including mainstream and chart music, and OD2s other stores (Including MSN) offer similar services - there's been no need for any feelings of impatience!
It's also worth pointing out that OD2 slashed their prices this morning by 50% to compete with the rivals from the US now entering the european market - all good news :)
Mark Lomas May 20, 2004