The majority of consumers have not yet accepted the subscription model to rent rather than buy music but this is likely to change over the next year, according to the head of the online service Napster Inc..
Once synonymous with piracy in online music, Napster now offers music via a subscription service but it is hindered by the dominance of Apple Computer's iPod which, due to a rights management issue, cannot play Napster music.
Napster Chief Executive Chris Gorog told Reuters that Apple's approach was "anti-consumer" and had held the subscription model back.
But Gorog expects the picture to change as consumers turn to mobile phones that also operate as MP3 players. He believes this access to a wider market will introduce more music fans to the concept of unlimited subscription services.
"The key obstacle to date to moving into mass adoption for the subscription model has been the iPod which has had the very large majority of market share with MP3 players."
"But the dynamic that will be happening ... in this calendar year is the phenomenon of music-enabled cell phones," he told Reuters in an interview.
ZERO TO HERO
"Napster will be going from an available market place ... of basically zero to ubiquity."
In its earliest days, Napster almost single-handedly launched Internet song swapping but was forced to close in July 2001 after a series of legal battles over copyright infringement.
It relaunched as a legal download site in 2003.
Earlier this month, it announced that it had signed a deal to become the exclusive online music subscription service to AOL, giving it access to an additional 350,000 subscribers on top of its current 566,000 paid subscribers.
Gorog said he expected the majority of AOL customers to join Napster, making it the number one subscription service worldwide.
EMusic, the independent subscription service, announced this month that it had 250,000 subscribers. Rhapsody, another service, does not publish its subscriber numbers.
Digital rights management, or DRM, was introduced by copyright holders to stop unauthorized duplication.
Napster uses the Microsoft's Windows PlayForSure system which was dealt a blow recently when Microsoft launched its own music device, the Zune player, with a different DRM.
But Gorog said he was not concerned by Zune as he did not think it was "a player" in the market and said Microsoft was still supporting the PlayForSure system, with both mobile phone makers Nokia and Motorola signing up.
Napster said in September last year that it had hired investment bank UBS to look into several possibilities after it received "interest by third parties".
Gorog would not give any further details on the issue and said simply that all options were on the table.
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