University of Napster

Napster is wasting no time jumping into high profile marketing maneuvers, taking on iTunes and the seven dwarfs with confidence and aplomb:

Penn State University announced today it is going to revolutionize the music world with a ground-breaking agreement with the online music service Napster, a division of Roxio.

….Penn State President Graham Spanier said the University has signed an agreement with Napster to launch a program in which Penn State will make Napster’s Premium Service available at no cost to its students. Napster will offer those students unlimited streaming and tethered downloads from a digital library of more than 500,000 songs, as well as 40 radio stations, access to six decades of Billboard chart data, an online magazine and community features. Students can also purchase permanent downloads that can be burned to CDs or transferred to portable devices for 99 cents each.

“This will be the first step in a new, legal approach designed to meet student interest in getting extensive digital access to music,” Spanier said. “We have already set up student focus groups at Penn State who have been testing the Napster service. We will essentially deploy thousands of testers in the spring semester to use this program and give us feedback before we roll it out for even wider student use in the fall of 2004.”

….Napster President and COO Mike Bebel said: “The Napster 2.0 premium service is designed to meet the needs of students who have demonstrated a voracious appetite for online music. Napster has improved upon the typical file sharing experience by delivering guaranteed high-quality tracks, a well-organized presentation of music, and community features that music fans love. Penn State, through the vision of President Spanier, has demonstrated critical leadership in this area and is paving the way for universities around the country to ensure that a legitimate marketplace for online music thrives.”

The program will be phased-in beginning January 12th, the first day of classes for Penn State’s spring semester. The Penn State-Napster agreement, and other similar arrangements expected to be formed by universities around the country, could revolutionize the way millions of college students obtain and listen to music through streaming audio and song file downloads via high-speed Internet and campus connections — all in a completely legal manner that complies with copyright laws. [PRNewswire] Very interesting. Napster is also selling prepaid music download cards in convenience stores and elsewhere. Read TDavid’s review of the new Napster here.

Reuters talked to an analyst:

“At every digital music conference, it seems that companies are pursuing the college market, whether paid, unpaid or in the form of a subsidy. Those are all ideas that have been bandied around,” said Mike McGuire, analyst with GartnerG2.

“This clearly is a significant opportunity for a service provider to get brand recognition and, assuming the students are happy, to retaining them as paying clients in the future,” he said.

McGuire said such a deal could also go a long way toward making college students aware of the legitimate online music services that still trail file-swapping sites in popularity.

“It would be really fabulous from a marketing perspective, because these companies are really a long way from making people aware of these services,” he said.