Napster - Trying to compete, or getting desperate?

It was the music download site that first caused major headaches for record company bosses when it was first launched as an illegal download site. Ten years on, Napster is now a legitimate music site (and has been since 2002), but is facing a battle of it’s own.

In response to increasing competition, the site has just revamped it’s packages with prices now starting at £5 per month. In addition, the new packages contain inclusive downloads, rather than the ability to simply stream music. Is this enough to see off competition from the likes of Spotify, We7, iTunes and rumoured offerings coming soon from Virgin Media and BSkyB.

This provides an ideal scenario for students to undertake an analysis of competitor’s strengths and weaknesses in a market that they have real knowledge. Is Spotify’s free service, funded by adverts, a more appealing model than paying a monthly charge? Is Napster’s refusal to create an iPhone App a mistake, given that Spotify have done just that. Which service do students use - if any - and why?