Napster's new plan: slash prices, stream music, survive

The Los Angeles-based company - purchased by big box retailer Best Buy in late 2008 - cut its monthly subscription price to US$5 and now lets users stream music from its library of 7 million songs to their computers. The new plan also allows for five DRM-free song downloads per month, which can be ported to an MP3 player.

The previous lowest-priced offering from Napster was $12.95 per month for streaming services, and its Napster to Go plan charges a monthly fee of $14.95 for downloads to compatible devices and smartphones.

The music-loving public has largely become used to downloading songs to keep, own and play on portable devices like Apple's iPod, Napster COO Christopher Allen acknowledged. The focus on streaming is meant to provide the foundation for Napster's future success: a music distribution model that he's calling the "celestial jukebox".

"One of the things we're bullish about, particularly with the relationship with Best Buy, is getting that unlimited on-demand streaming from the cloud to any number of Internet-connected consumer electronics devices," Allen told the E-Commerce Times. "It's not yet mainstream, but it's clearly the trend. When you look at the combination of networks and devices connected to networks, we think, over time, the value placed on streaming subscription services will increase. It will take a period of years, so we go back to the hybrid model - giving them something they like today and understand, while adding more and more devices where they can stream on demand."

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