Napster has put a new twist on the notion of being a loss leader. It has actually managed to sell more songs for rival online music services than for its own product, according to a survey conducted by a university customer.
Not a single University of Rochester student admitted to buying a song via Napster during the Fall 2004 semester. Instead, eight per cent of the students turned to the likes of iTunes and Musicmatch to buy songs they enjoy. That’s an ominous sign for a company spending millions to seed the university market with music in the hopes of unseating Apple as the clear leader in online music.
[…] The University of Rochester has boasted about being one of the Napsterized schools that force music rental services on students in the hopes of curbing P2P file-trading. In almost every case, Napster offers such schools a massive discount off its $9.95 per month fee, making it easier for the schools to stomach the cost of opening music shops. The schools also typically receive hardware donations from unnamed sponsors.