Making the music gamble
Published: 02 Sep 2004 15:10 BST
By any measure, Napster chief executive Chris Gorog is one of the world's biggest believers in digital music.
Eighteen months ago, his company, Roxio, was a successful, if unspectacular, player in the CD-burning software market. Then, in a rapid-fire corporate transformation, he purchased the Napster brand name at a bankruptcy auction, bought the record-label-backed Pressplay subscription service and relaunched the Napster brand as an iTunes song store rival and online music subscription service.
A few weeks ago, he took the final step, selling off the old Roxio business and changing the company's name to Napster altogether. The move has won him kudos from those who saw the old business slowing down, along with head-shakes of disbelief from those who think Napster is outmatched against bigger rivals such as Apple Computer, Microsoft and Sony.
That chutzpah is being thrown into relief this week, as Microsoft prepares to launch its MSN digital music store. Gorog has been one of the most vocal backers of Microsoft media technology, but the new Microsoft store will compete directly with his download business.
Still, he says he's no more worried about this than he was about Sony or Wal-Mart Stores. Both are big competitors, but Gorog claims that neither has cut into Roxio's market share.
CNET News.com recently spoke with Gorog about his company's radical bet on digital music and his potentially conflicted relationship with Microsoft.
Q: Your decision to sell your old business in favour of Napster was a big one. What helped make the final decision?
A: Well, this move enables us to focus 100 percent on the online music space, which is the primary strategic focus for our company. Obviously, it's an area that has had explosive growth, and is expected to be a multibillion-dollar industry over the next handful of years. We have secured a very prominent position in the early development of the space, and we wanted to make sure that we had the opportunity to bring 100 percent of our focus to this.
Had this been the idea ever since buying the Napster name?
I wouldn't say it was a plan that began to gel 18 months ago. But it is certainly something that has been on our minds for the last year or so. The online music sector is growing fast, the optical recording sector for consumers has really begun to mature, and growth has slowed down considerably.
Were there any specific events that tipped the scale -- that made you decide to get out of the old business and into the new?
No, there wasn't any event that was a catalyst. It was the recognition that a small company has to be laser-focused on its primary objective, and our company's primary objective is to remain very dominant in digital media.
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