Napster to Sell Prepaid Cards for Web Music
The original Napster taught a generation how to download music without paying for it. The new version hopes to win young customers by letting them pay in advance.
Prepaid cards for tunes from the Napster online store soon will be on sale at 14,000 electronics retailers, supermarkets, convenience stores and other outlets around the country, Santa Clara-based Roxio Corp. plans to announce today. The cards are being produced by InComm Inc. of Atlanta, the leading distributor of prepaid cards for wireless phone services and other ventures.
Other online music services are planning to do the same, hoping to get a taste of the success that the long-distance companies have enjoyed from about $6 billion in annual prepaid-card sales. RealNetworks Inc.’s Rhapsody and FullAudio Inc.’s MusicNow plan to introduce prepaid cards next month, around the same time as Roxio though in fewer outlets.
Roxio bought the Napster name and technology at a bankruptcy auction last year. It plans to launch the reincarnation Wednesday, replacing the original Napster’s song-sharing network with a downloadable music store and a subscription service offering unlimited music rentals for $10 a month.
The prepaid cards should help the services solve one of the biggest problems they face as they try to grow into sustainable businesses. Their standard method of collecting money from customers -- by taking credit card numbers online -- excludes most teenage customers and scares off many older ones.
Mike Bebel, the head of Roxio’s Napster division, said the cards also would make it possible to buy downloads as gifts, potentially introducing more people to the service.
“We’re positive that the effect here is to substantially increase the opportunity for people to engage in online music legitimately,” Bebel said. “To reach all of the consumers that have in some cases not been reachable through typical channels, we felt that this made sense.”
Analyst Michael McGuire of GartnerG2, a technology research firm, said consumers often need help making the leap from buying in stores to buying online. A critically important way to do that, he said, is to introduce them to online purchasing in a place where they’re used to buying things.
“You have to realize that you’re not competing against existing products. What you’re competing against, really, is non-consumers,” he said.
People will be able to use the Napster and MusicNow cards to download songs, which sell for 99 cents when bought individually. Rhapsody’s card will be good for 10 individual songs and three months’ access to the service’s online jukebox and customized radio stations.
The Napster cards are likely to compete for space near the convenience-store cash register with many other small items, but Bebel doesn’t think people will have any problem understanding what they’re for. Judging by the success of prepaid cards generally, “I’d say the average consumer has a pretty good understanding of what these cards are and what they represent,” Bebel said. “They wouldn’t mistake it for an air freshener.”
