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Misadventures in naming:
Roxio misses corporate branding boat
as it continues to drain the life out of Napster.

A Russian cartoon in which Police are harrassing a street musician for not paying royalties on the songs he's playing.

SAN FRANCISCO, Feb 16, 2004. If you can remember that far back, Napster started out as an underground movement to share music files, fueled by the perceived greed and intransigence of a music industry which insisted on selling albums when music lovers really wanted songs. And also fueled by that heady excitement of ripping off the robber barons themselves.

Napster's branding happened from the bottom up.

The Napster brand exuded naughtiness, largely because it was started by a feisty Irish kid from Boston--someone users could really identify with--not a big corporation. The value of the brand could be measured not by its advertising budget, but by its attitude, its authenticity and the fact that it was first. Napster drastically tilted the balance of power in the music business toward the consumer. Apple's "Rip, Mix, Burn" campaign piggy-backed beautifully on those sentiments.

So along came the big record labels and put Napster into bankrupcy. Then one of them, Bertelsmann, a staid German media company--could you find a more unlikely candidate?--snapped up the brand. Fortune called it "an intoxicating dalliance." But soon after, facing $17 billion in lawsuits from other record labels and music publishers, they dropped it like a hot potato.

Roxio, (ROXI) which sells CD-copying software to PC makers, moved in after the dust settled and bought the Napster brand name. But by that time, other file sharing services had long since picked up where Napster left off, services with names like I-Mesh, Kazaa, Limewire, Direct Connect and Bit Torrent.

The Napster brand may have started all this, but we are living in a post-Napster world.

Roxio's plan was to relaunch Napster as a legit pay-to-play service. Napster 2.0 was launched with a star-studded party at the House of Blues in Los Angeles, where Chairman and CEO Chris Gorog hailed the reborn Napster as the best-known brand in online music. He probably should have put that in the past tense because the most recent estimates show that it has a 12% share of the music download business vs. Apple's 56%. Not only is Roxie losing money--Napster lost $15 million in its first two month's of operation--but many top execs have jumped ship as well.

Steve Jobs steals branding deal out from under Roxie.

One of the partnerships Roxie was counting on was a breakthrough deal with Hewlett-Packard that would have put their software on millions of HP computers--and put Napster back on the map. No such luck. Last October, HP suddenly returned Roxie's check for $250,000 and canceled their agreement without an explanation. Of course, now we know why. HP decided to work with the market leader, Apple, not the former market leader. In January Apple and HP launched a strategic partnership, which will put I-Tunes software on those same millions of computers. Apple will also be putting out an I-Pod branded with HP's name.

So what does all this mean from a naming and branding perspective?

Having a cool company name is great. But just because it meant something to millions of people a couple of years ago, doesn't mean they're complete idiots and can't tell the difference between the old Napster and the rebranded Napster. The old Napster was like the wild west. The new Napster is like some canned version of the wild west at Disneyworld. Just because you own it doesn't mean the fans will buy it.

So let's have a little respect for the people at the receiving end of all this hype. If the folks at Roxio were brave enough to build some countercultural elements into the new software and promotion, if they were smart enough to understand how to tinker with the formula, they might have connected with some of the roots of the brand. But this was an uphill fight from the beginning.