New Napster in 2005

Fast forward to 2005 and Napster now has around 410,000 subscribers in the United States, Canada and the United Kingdom who pay up to £14.95 each month to gain access to about 1.5 million songs. The company is seeking to launch in other countries such as Japan through partnerships.

The online music download environment has also changed with legal music downloading propelled through increasing adoption of broadband, the success of Apple iTunes and its portable music player, the iPod, which by 2005 had achieved around half a billion sales.

Napster gains its main revenues from online subscriptions and permanent music downloads. The Napster service offers subscribers on-demand access to over 1 million tracks that can be streamed or downloaded as well as the ability to purchase individual tracks or albums on an a la carte basis. Subscription and permanent download fees are paid by end-user customers in advance via credit card, online payment systems or redemption of pre-paid cards, gift certificates or promotional codes. Napster also periodically licenses merchandising rights and resells hardware that its end-users use to store and replay their music.

BBC (2005) estimated that the global music market is now worth $33 billion (£18.3 billion) a year while the online music market accounted for around 5% of all sales in the first half of 2005. Napster (2005), quoting Forrester Research estimates that United States purchases of downloadable digital music will exceed $1.9 billion by 2007 and that revenues from online music subscription services such as Napster will exceed $800 million by 2007.

BBC (2005) reports Brad Duea, president of Napster, as saying:

The number one brand attribute at the time Napster was shut down was innovation. The second highest characteristic was actually 'free'. The difference now is that the number one attribute is still innovation. Free is now way down on the list. People are able to search for more music than was ever possible at retail, even in the largest megastore.

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