John Paczkowski

Recent Posts by John Paczkowski

Former Napster CEO’s “Dream” More of a Nightmare When You Really Think About It

imagesBest Buy said this morning that it is “streamlining Napster’s executive structure”–corporate parlance for sacking the faltering music service’s leadership, which has had a tough time finding a winning business model in a digital music world dominated by Apple’s (AAPL) iTunes Store.

CEO Chris Gorog and president Brad Duea are both leaving Napster, which the big-box retailer acquired a little over a year ago.

“We began with a simple idea–‘legalizing Napster’–and spent almost a decade trying to perfect that dream,” Gorog wrote in a farewell post on the Napster blog.

“It wasn’t always easy,” he added. “We were criticized at times for ‘renting’ music. But we thought then–and still believe quite strongly–that we had a better approach to digital music. Why buy downloads–when for a small monthly fee you can have access to–everything? Well after a lot of years of chasing this dream of–unlimited access, anytime, anywhere–it seems to be catching on.”

Erm, not really. Napster had 760,000 subscribers in 2008. Today it has about 700,000. That’s not catching on, it’s holding on–for dear life. And, to be fair, the dream to which Gorog refers is a tough one to chase when your service doesn’t work on the dominant media hardware of the day, even after Best Buy (BBY) acquires you for $121 million.

At this point, Napster is caught in a nightmare reality in which its legal subscription service stagnates as rivals like Apple’s iTunes and Amazon (AMZN) continue to push it to the periphery of the digital music market.

Below, Best Buy’s statement on the “streamlining.”

As part of our ongoing efforts to accelerate our growth in digital entertainment, we are currently making changes to our Napster business unit. These changes are part of Best Buy’s efforts to streamline Napster’s executive structure and more effectively integrate Napster’s corporate activities into Best Buy.

As part of these changes, the positions of Napster CEO, currently held by Chris Gorog, and the position of president of Napster, currently held by Brad Duea, have been eliminated. Chris and Brad are moving on to pursue the next chapters in their careers. We deeply appreciate Chris’s and Brad’s contributions in building Napster over the years, and particularly their leadership this past year as we’ve welcomed Napster into the Best Buy family of brands.

Christopher Allen, previously Napster’s COO, has been named General Manager, Napster, reporting to Chris Homeister, SVP Merchandising Entertainment.

These changes will allow Best Buy to focus on creating new opportunities in both the digital music and digital video space moving forward.

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