Roxio and the Resurrection of Napster
Under the leadership of Chris Gorog, Napster was riding high as their fiscal year 2007 drew to a close. oGrog’s extensive experience in the media and entertainment industry shaped and contributed to their success. While Chairman and CEO of Roxio, he had taken that firm public in 2001.
Napster is considered part of the key software shaping the Internet. This software made it possible for industries to copy and play music for free. By-passing the expensive music industry infrastructure, Napster capitalized on the growth of portable music systems and a lack of clear legal precedent against music sharing. After four years of legal battles with the Recording Industry Association of America, Napster filed for bankruptcy.
As Roxio’s CEO, Gorog are company to a media company. RElaunched in 2003 as a legal download music provider, they went public in 2005. They approached the market differently this time by partnering with Microsoft and music producers.
Uncertain of the future of the online music industry, Roxio maintained their market leadership in the CD-and DVD-burning software (bundled with all new PCs operated by Microsoft XP). Their dynamic strategy was further demonstrated when Gorog sold Roxio’s software business in January 2004 and then renamed the surviving online-music company Napster.
This dynamic industry has seen the entry of Yahoo! (in 2005) and stiff competition from iTunes. Unsure of what industry business model would be effective, Gorog returned to the free model (in addition to the subscription download model). Though this time it would legal with Napster paying the record labels form their advertising revenues. Subscriber growth on Napster continued to decline. And since spinoff from Adaptec through April 2007, Napster has never shown a profit.
1. Please discuss the different types of strategies Napster used through their various Resurrections. (Please use the strategies discussed in Chapters 5 and 6 and provide some details).
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