So a few of you have been asking me about what to do about Napster. I recently read a great article in the Economist about the future of music (thanks Ken). It talks about how handset manufacturers – Nokia in particular – are bundling music services with their handset. Consumers get “free” music for one year and Nokia passes a royalty through to the Record Labels (cost of the subscription is included in the handset). It’s a win-win for consumers and the Labels. I’m not sure how Metallica fares, but let’s be honest. Anyone who is blaming the iPod for the sound quality of their music is just a little bit out of touch with reality - particularly with how people are consuming their product.
Now, what if Best Buy were able to do what Nokia did? They have a pretty robust private label capability, scale distribution in the US and Europe (Best Buy Mobile and Car Phone Warehouse), relationships with the carriers and a newly acquired music service. Combine that with the ability to collect and incorporate employee and consumer feedback for product development and I think they’ve got a decent shot grabbing some market share. All the pieces are there and it represents the type of forward looking point of view that I talked about before. What do you think?
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