Napster Changes Its Tune on an iPhone App, and Joins the Crowd

Last year, Best Buy (BBY) announced that it had an awesome Napster iPhone app ready to go, but didn’t feel like sharing it with the rest of us. Now it’s ready.

So what is it? Based on the iTunes store description, it’s just like the ones available via Rhapsody, MOG, Rdio and Thumbplay: A free app that doesn’t really do much unless you hook it up to a $10/month subscription service. Then you get all the music you want, streamed on demand, with a caching feature so you can store a good chunk of it for airplanes, subways, etc.

A year ago, Napster president Brad Duea told me that $10 a month was too much to charge for mobile access, which is why the company was only offering a $5/month plan for PC-based service.

Not sure what’s happened to change the company’s mind since then. Except, perhaps, that Duea and Napster’s old management team no longer work there.

So to sum up, here’s the new dominant paradigm in (legal) online music. Free streaming is (just about) out. You can still buy a song at a time, but if you want to listen to all the music you want on your PC and/or iPod, that’s $5 a month. Getting that same service on your Apple (AAPL) handset–or on Google’s (GOOG) Android, etc.–costs $10.

And if you’re still waiting for Spotify to show up in the U.S. (Definitely going to happen this year! Or maybe not!), be aware that the service won’t vary much from that formula. It’s going to be another subscription service priced at about $10 a month.

The big difference, from a licensing perspective: The Spotify guys would like to replicate their European model, which provides a free, tethered, ad-supported on-demand streaming service.