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Summary:

Napster CEO Chris Gorog will step down after eight years as CEO, amid a corporate restructuring that also includes the dismissal of president Brad Duea. Both executives’ positions have been eliminated by corporate parent Best Buy.

Napster CEO Chris Gorog will step down after eight years as CEO amid a corporate restructuring that also includes the dismissal of President Brad Duea. Both executives’ positions have been eliminated by corporate parent Best Buy, and Chief Operating Officer Christopher Allen will become Napster’s general manager, according to a corporate spokesperson. Despite increased attention devoted to music subscriptions over the past several months, Napster has mostly spun its wheels, losing market share as new competitors have sprung up.

In the nearly 20 months since Best Buy announced plans to acquire Napster for $121 million, the music subscription market has become a lot more crowded, with services such as Spotify and MOG capturing most of the buzz. Napster and its longtime rival, RealNetworks-owned Rhapsody, each have struggled for years to reach 1 million monthly customers. Napster hasn’t broken out its subscriber numbers since the Best Buy deal, but its last reported figure was 708,000; Gorog’s goodbye blog post says it has “many hundreds of thousands” of subscribers. (Compare that with European startup Spotify, which 15 months since its launch already reports “several hundred thousand premium subscribers,” and is preparing to launch in the U.S.) Despite dropping its monthly subscription price to as low as $5, depending on commitment, Napster’s site traffic is down, according to this Compete.com chart, and its market share for digital downloads was shrinking as of last summer.  Moreover, its mobile strategy has lagged behind others whose mobile apps allow on-demand streams, although Gorog still writes that streams are “coming soon!” to Napster’s app.

Given overall trends in media consumption, Gorog might be right in saying that consumers are increasingly prepared to subscribe to a universe of music rather than own collections of CDs and song files. But as the company cedes ground to new competitors, its new owners appear to have had enough.

By Paul Bonanos

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  1. http://www.tracked.com/person/william_gorog/compensation

    Don’t cry for him. He’s making a ton of dough!

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  2. Blimey. Napster pretty much started the whole internet based music industry didn’t it http://tiny.cc/cHtQu ?

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  3. [...] market that includes Spotify, incumbents Rhapsody (owned by RealNetworks) and Best Buy-owned Napster, new entrant MOG, and forthcoming Rdio. As I’ve written before, the key differentiators will [...]

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  4. [...] rekindle interest in a model that has flagged somewhat over the years. Rhapsody and longtime rival Napster now face competition from upstarts such as MOG and Spotify, which offer updated models that have [...]

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  5. [...] mobile experience is one key differentiator that sets it apart from incumbents such as Rhapsody and Napster as well as upstarts MOG and Spotify, the latter of which hasn’t launched in the U.S. [...]

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  6. [...] addition to the on-demand component. Music service providers, including Rhapsody and Best Buy-owned Napster, have long hoped that adding on-demand mobile access would boost consumer interest in subscribing [...]

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  7. [...] access is renewing interest in on-demand music subscriptions. Older services such as Rhapsody and Napster now appear prescient, though they never quite went mainstream, and newer ones such as Spotify and [...]

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  8. [...] end of 2009, according to RealNetworks, down from a peak of 800,000 earlier in the year. Competitor Napster, owned by Best Buy since fall 2008, no longer reports the size of its subscriber base, but was last [...]

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