Analyst: Napster, Real Music Subscriptions Not Priced For Success

Market research by Park Associates suggests that portable music subscription services priced above $10.00 can’t succeed. That’s a direct reference to Real and Napster with $14.95 a month fees. If PA’s numbers are right, 41 percent of MP3 device owners in the U.S. won’t pay more than $10. (Scarier number: one third thinks the services should be free.)
But analyst Harry Wang recognizes the different position the two are in compared to Yahoo, which can afford to support a below-market price of $4.99 a month. He sees telecom alliances as one solution for pure play Napster and Real, which isn’t big enough to subsidize its music price. Napster and BellSouth have teamed up while Real is working with Comcast. Unfortunately for them, Yahoo can play this game, too — it has a new deal with SBC and I wouldn’t be surprised to see one with Verizon.

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