Evaluate how Napster has varied each element of the marketing mix to compete with traditional and online music retailers. This case about online music subscription service Napster illustrates how different elements of the mix can be varied online. It also highlights success factors for developing an online marketing strategy since Napster’s proposition, objectives, competitors and risk factors are all reviewed.

The Napster brand has had a varied history. Its initial incarnation was as the first widely used service for ‘free’

peer-to-peer (P2P) music sharing. The record companies mounted a legal challenge to Napster due to lost revenues on music sales which eventually forced it to close. But the Napster brand was purchased and its second incarnation offers a legal music download service in direct competition with Apple’s iTunes.

The original Napster Napster was initially created between 1998 and 1999 by a 19-year-old called Shawn Fanning while he attended Boston’s Northeastern University. He wrote the program initially as a way of solving a problem for a friend who wanted to find music downloads more easily online. The name ‘Napster’ came from Fanning’s nickname.

The system was known as peer-to-peer since it enabled music tracks stored on other Internet user’s hard disks in MP3 format to be searched and shared with other Internet users. Strictly speaking, the service was not a pure P2P since central services indexed the tracks available and their locations in a similar way to which instant messaging (IM) works.

The capability to try a range of tracks proved irresistible and Napster use peaked with 26.4 million users worldwide in February 2001.

It was not long before several major recording companies backed by the RIAA (Recording Industry Association of America) launched a lawsuit. Of course, such an action also gave Napster tremendous PR and more users trialled the service. Some individual bands also responded with lawsuits.

Rock band Metallica found that a demo of their song ‘I disappear’ began circulating on the Napster network and was eventually played on the radio. Other well-known artists who vented their ire on Napster included Madonna and Eminem by posting false ‘cuckoo egg’ files instead of music; Madonna asked the downloader: ‘What the fuck do you think you’re doing?’! However, not all artists felt the service was negative for them. UK band Radiohead prereleased some tracks of their album Kid A on to Napster and subsequently became Number 1 in the US despite failing to achieve this previously.