Napster 2.0

The case examines the challenges faced by the CEO of NASDAQ-listed software company Roxio, following its acquisition and relaunch of the controversial Napster brand, for distribution of digital music. The company faces stiff competition, primarily from Apple’s iTunes and significant challenges of market awareness and customer acquisition, given tight marketing resources. At the time of the case, Roxio combines its legacy CD burning software business with the new Napster platform, although it has since spun of the software business and become a pure-play online music distributor, the only such player in the market. The case illustrates the evolution of a technology from an illegal, disruptive, out-of-bounds product towards a mainstream market solution. As such it faces the challenge of growing a new market and surviving as an early entrant into that market.