Napster cuts price in battle with Spotify

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Napster, which boasts a music library of around eight million tracks, has cut the cost of its "unlimited" subscription from £9.99 per month to £5 per month, half the price of Spotify's premium service. The fee entitles users to stream an unlimited number of songs to their computer at no extra cost, as well as download and keep any five tracks.

The company launched a similar service in the US in May.

Napster, one of the original online music pioneers, is facing stiff competition in an increasingly congested market, with other web music services, such as Spotify and We7, growing in popularity.

Spotify has a free, ad-supported service, but premium subscribers willing to pay £9.99 per month can listen to tracks ad-free, as well as synchronise playlists with their mobile phone, and listen to songs when their computer is not connected to the internet. We7 offers a mixture of free, ad-supported streaming and paid-for downloads, and claims to be the most-visited music website in the UK.

Napster said that the price cut was not a reaction to Spotify's expanding user base. A spokesman for the company said Spotify's business model was brave, and told the technology website Cnet that "ad-funded models have never worked in the past, and there's no reason to believe they will now".

The company has also signed a deal with Dell to bundle a free one-year Napster subscription with its Studio and Inspiron range of laptops. Owners of these Dell machines will receive an activation code for the Napster Unlimited service, and will be able to download and keep 60 tracks.

Napster has also revealed that it has developed an iPhone application. Thorsten Schliesche, vice-president of sales and marketing for Napster, said the application was unlikely to be released until the record labels reduced the costs of streaming music to mobile phones. He said that Spotify's charge of £9.95 per month for this service was not a business model he wished to replicate.



Source:telegraph