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Napster Commits iPhone-cide; Opts Out Of Streaming App Competition For Now

While RealNetworks (NSDQ: RNWK) looks for Apple (NSDQ: AAPL) to approve its Rhapsody iPhone app and newcomer Spotify prepares to launch, the wait for a similar streaming app from Napster is over: there won’t be one. A Napster rep e-mailed this morning to explain that the Best Buy subscription music service has designed an app that would allow subscriber streaming to the iPhone but won’t submit it for Apple approval “due to the high licensing fees for streaming to a mobile phone.”

Napster says it would have to charge too much for mobile streaming, pointing to $15 fees for some iPhone streaming apps, and is working with the labels to try to lower the price point before offering mobile streaming, including playlists and radio stations. Instead, Napster is offering browser-based for use from most web-enabled phones.

Napster subscriptions run $5 a month and include five free songs a month. Subscribers can access existing accounts, use the catalog, and download tracks “over to the air” to the handset. Napster automatically puts a DRM-free MP3 backup of the song into the user’s PC account. New accounts can be created via the mobile site and credits can be redeemed. But the heart of this strategy won’t work on iPhones because Apple bars “over the air” downloads from third parties; iPhone users can buy via but downloads will go only to the PC and will have to be synced via iTunes to listen via the iPhone.

— Best Buy is trying a little of that corporate synergy this month. Customers who buy a contract mobile phone will get three months of Napster free, including 15 songs to keep.
— Until now, the only way to get Napster streamed as a mobile subscription was through AT&T Napster Mobile for $7.49 a month (with the same five free songs). [Note: Napster says streaming isn’t possible through the AT&T (NYSE: T) sub either.] We’ve confirmed that’s still being offered along with a la carte purchases at $1.99 a pop. Napster says it “involved AT&T in the planning process” for