Bad News For Yahoo! Auctions May Be Bad News For Napster

from the not-looking-good dept

And weren’t we just saying that people pay are willing to pay for content? Maybe not. Someone counting up the number of auctions on Yahoo! Auctions noticed that listings have dropped by 90% since they instituted a fee. This is much greater than was expected. This article suggests this is a bad omen for Napster since they’re going to depend on a critical mass of people subscribing. They also point out (and I’ve argued this before) that the fewer people who use Napster the less valuable it becomes, making people less willing to pay… I see a spiral heading downward.

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Comments on “Bad News For Yahoo! Auctions May Be Bad News For Napster”

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Ed says:

Different situation

I can understand the drop in Yahoo auctions, but the situation is different from Napster. EBay has always had fees, so once Yahoo added them, too, there was no good reason for anybody who still wanted to sell stuff and didn’t mind paying a listing fee not to move to EBay’s much larger marketplace. It’s possible that if Napster keeps enough of a subscriber base after adding fees that they might find themselves in the same position as eBay: only the people who really want something for nothing will go to the less populated free services, and any second-tier service that adds a fee will lose all its customers to the leader.

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