I just read an article on CNN Money about Napster (read it here) and it got me thinking about the future of Napster and the impact on the subscription music industry. I’ve been a fan of Rhapsody for a long time (obvious if you read this site) and have always thought that the music subscription model is superior to the iTunes/MP3 store model. With the introduction of DRM free MP3s in Rhapsody, I’m even more convinced of it - especially for someone who is online all of the time like I am. Rhapsody makes listening to whatever I want, whenever I want, as much as I want really easy.

Napster is the same subscription model and with their new player version, looks A LOT like Rhapsody (go figure). However, according to this article, their subscription numbers are flat, they are losing money hand over fist and don’t have a strong marketing partnership like the MTV Networks with Rhapsody. In addition, Rhapsody has taken over the Urge service AND Yahoo Music Service. Rhapsody is growing while Napster is not. So, what happens to Napster? They have cash in the back and a really low stock price - great acquisition candidate by someone - Apple? Amazon? RealNetworks? Are we better off with two major subscription services or is the market not big enough?

I think the bigger question is when does Apple come out with it’s own subscription service or will that kill the iTunes hegemony? If iTunes had it’s own subscription service, it would certainly be lights out for Napster, but might help Rhapsody as the true legit competitor to iTunes. It will be an interesting battle if that were to happen.