>From what I have read about the record industry's demands for royalties, it is based upon the number of times a song is played. The more times an internet radio station plays a song, the more money has to be paid to the royalty collectors (riaa, bmi, soundscan, etc.). I understand there are complex formulas that are still evolving based upon number of listeners, number of "channels" and total revenue, however song plays continues to be part of this forumula.
Thus Napster's costs are "variable", not "fixed". The more music Napster plays, the more it has to pay to the royalty collectors. (Motorcycle legend Jesse James, who started his career being a collector for Rick Rubin, co-head of Columbia Records, has a tatoo on the palm of his hands with the script "Pay Up Sucka"). Thus it is hard to believe that Napster can still make money by lowering the price of its subscriptions, if it is indeed below its costs. Since Best Buy owns Napster, maybe Best Buy just looks at Napster as a loss-leading marketing tool to (eventually) drive traffic to its digital music sales. I believe this is what Walmart is doing with its own music sales. Since Rhapsody is not owned by any conglomerate (although it is its own mini-conglomerate with its venture with MTV), maybe this is indeed bad news for Rhapsody. I guess I just feel sorry for Rhapsody because it took the risk to pioneer this type of subscription format and now maybe it is threatened if indeed it can't meet this new challenge from Napster. If it is Rhapsody that eventually "goes", then Napster may have a monopoly. Not good for the consumer if prices later rise. And as mentioned earlier, not good for Logitech, to the extent it depends on its own stake in its premium services. -- mortslim ------------------------------------------------------------------------ mortslim's Profile: http://forums.slimdevices.com/member.php?userid=11039 View this thread: http://forums.slimdevices.com/showthread.php?t=63479 _______________________________________________ discuss mailing list [email protected] http://lists.slimdevices.com/mailman/listinfo/discuss
