Napster takes a multi-channel approach with store gift cards

Napster may have once stood for an anti-retail strategy of free file-sharing of digital music, but the new Napster under Roxio Inc. is expanding its pro-retail side with gift cards in some 20,000 retail locations including RadioShack and Best Buy stores. “These new offerings make Napster easily available both online and at retail, where the Roxio brand is extremely strong, and they`re a great way to make online music available to a broader audience," said Roxio CEO Chris Gorog.

The Napster gift card offers 15 music downloads for $14.85. Roxio is promoting them as Christmas stocking stuffers as well as another way for many of its best customers – young people without their own credit cards – to purchase music at Napster.com. Gift card recipients use a unique code on each card to complete an online purchase. Participating retailers also include RiteAid, CompUSA, Safeway, ExxonMobil and Kroger.

In addition, Napster is making its Napster Burnpak CD-burning software kit available through Best Buy, CompUSa and other retailers for $29.95.

Josh Bernoff, analyst at Forrester Research Inc. who follows the digital music industry, says he knows of no other music service offering the same type of gift cards in multiple stores, though Apple Inc. offers gift cards for its iTunes Music Store at 70 Apple stores. The multi-channel gift card approach is also part of the business plan of Echo.com, an online digital music service formed by several retailers that was expected to launch early next year. A spokeswoman for Echo.com says there is no definite launch date, but that the company expects to offer gift cards through its partners` retail stores. Echo’s investment partners include Best Buy Co., Borders Group Inc., Tower Records and Wherehouse Music.

Napster began offering its gift cards in retail stores in mid-November. A spokeswoman says sales are going as well as expected. Napster is also offering a free 3-day trial of its subscription service to any consumers who log onto Napster.com this month.