Interview: Napster CTO Bill Pence, Part 2

Bill Pence: Within the Napster company we believe that choice is good, and everything we have done within our power is to enable choice. Choice in business models, choice in content, choice in access points, choice in devices. Wherever possible we will have choice - that is our position. Apple has a different view. In most markets, choice has historically been something that provides a lot of value to customers. So, time will tell.

BetaNews: Although it is the largest purveyor of DRM enabled media, Apple chose not to participate in a congressional hearing about DRM. What do you believe their motivation was for that?

Pence: I did participate and it came up in the hearing. They were cited for not participating, but I honestly cannot tell you why they chose not to participate.

BN: Do you feel that Apple is using its proprietary AAC-based DRM to build a digital music monopoly?

Pence: It's just way too early in the market in my opinion to talk about that. This whole thing about proprietary and non-proprietary, all the arguments are just so hyperbolic now. What is proprietary? If there's one ubiquitous codec right now, it's still MP3 if you look at it just in terms of volume usage across the planet. Within the legitimate pay services, you can slice and dice it all the different ways you want in terms of whether WMA, AAC, or some other codec is in the lead.

Clearly, Apple's use of AAC is very, very strong but is it a proprietary solution? Is it an open solution? None of these codecs are being used in a standard way. WMA is Microsoft proprietary, AAC was licensed from an outside organization and is used in a proprietary way. None of them are W3 standards codecs - there's no such thing.

BN: What effect could satellite radio have? Will it make music downloads music dinosaurs?

Pence: Clearly satellite radio being an on-demand access model, and a very popular one I think, further validates that the subscription model is very viable in the music space. It is fair to say that if you look at something like XM or Sirius and as they evolve and we evolve there is a certain portion of the market where we overlap. There is no question.

Clearly satellite radio is still a linear broadcast medium. It's not a full on-demand service; it's a program service. But they have quite a bit of compelling programming. It will be interesting to see how the overlap evolves. Right now I am most encouraged by the success of satellite radio in terms of its really validating against skepticism in terms of subscription and achieving some success.

Our vision of Napster is that it is an "anywhere you are" music service. You go home, you power up through your TV and from your stereo, you access the music that you downloaded to your PC; you go into the car and you plug in a device; or you carry the device with you. In the future you can get access to Napster through the cell phone too.

BN: With the new release of Apple's Tiger OS, is Napster planning on releasing an Mac OS X client?

Pence: We've always said that we'd like to support any and all platforms that make sense for us including the Mac, but at the moment there really is no way to support any Mac platform because Appe does not license the FairPlay DRM to anybody else to build a service on. So unlike the situation where anybody can license Windows Media DRM and build an application on the PC, to access the Apple platform in a way that provides a secure service there is really no option. We'd like to but we can't - that's the short answer.

BN: Is video a part of Napster's future direction? Chris Gorog, Napster chairman and chief executive, has hinted at that.

Pence: We have video in the service now. There is some change coming in the market in terms of how videos are provided by the content owners at the current time. We continue to look at that and evaluate how important that is. Right now we are focused on consolidating everything we have done to provide the best possible experience in providing music. We think that we are one of the few pure plays that have the brand and the legacy to get that right.

Cluttering it with advertising or 15 other sports packages the way Real does is not where we are at. The Real and Rhapsody system basically has three DRMs built into them right now. It's just a mess basically. I've always had a lot of respect for the Rhapsody service; it's been very clean and efficient. But it's becoming more cluttered and if you read some of the reviews of Rhapsody To Go, I think you'll see that reflected.

BN: When can we expect to see the next release of Napster?

Pence: Typically we do refreshes at least three times a year with a major release each year. You'll see another one coming up within the next couple of months.

BN: Rather than a point release, when can we expect to see the next big thing from Napster?

Pence: There are a couple of different directions that you will likely see us go. In the core platform we continue to focus on making the music experience even better - improving the ability to discover music that is relevant to you, enhanced personalization and discovery mechanisms to make sure that people get the full experience of our catalog.

In terms of expanding the reach of the platform, we continue to be focused on three main areas. These are: building out complete support in the living room so that Napster becomes the primary jukebox in the sky for accessing content over your traditional home stereo system in the home; portability with Napster To Go and automobile integrations are a big focus for us; and then mobile, cell phones and other devices.