Napster Takes On iPod With New, Portable Service

New technology allows subscription service to work with portable players.

The music-subscription service Napster unveiled a portable version on Wednesday that will allow it to tackle Apple's popular iPod head-on.

Called Napster to Go, the service includes a new technology that allows it to work with portable players. A $30 million ad campaign for the service will launch during the Super Bowl on Sunday.

"Introducing the world's first portable music service," reads an ad on Napster's official site. "Now you can fill and refill your compatible MP3 player without paying 99 cents per track. Get all the music you want in a whole new way."

The "99 cent" jab refers to the typical per-track cost of Apple's iTunes download service, which currently holds approximately 70 percent of the download market. The campaign urges people to compare the cost of spending $10,000 to buy and transfer 10,000 songs from iTunes to an iPod, versus Napster's $14.95 per-month fee to do the same with an unlimited number of the service's million-plus tracks, according to a Reuters report.

The campaign is an aggressive one for the former renegade download service (see "Hello, Kitty: Napster Is Back"). Experts estimate that it represents up to 70 percent of the amount the company is expected to spend on marketing for 2005.

Napster's service works with a number of PC-compatible players from companies such as Creative, Gateway, iRiver, Rio and Samsung, and essentially operates on the premise that the songs are rented rather than purchased. The manufacturers are also working on new Napster-compatible devices that are expected to cost between $250-$500. MusicNow and RealNetworks' Rhapsody are expected to offer competing download-to-go products this year.

The iPod has become such a sensation that Monday's USA Today ran a front-page story referring to the "iPod Nation," dissecting the allure of the portable device, which sold more than 8 million units in 2004 alone.

While iTunes allows users to purchase songs and store them on their iPods, until recently other music-subscription services had limited ability to store songs on portable players. The breakthrough came from a new type of Microsoft digital-rights management software called Janus — referred to in the digital press as a potential "iPod killer" — which opened the door for subscription services to offer a more portable product. Janus works by adding a hacker-resistant "clock" to music files encoded in Microsoft's Windows Media Audio format, through which the files expire when users end their subscriptions.

For complete digital music coverage, check out the Digital Music Reports.