IN A BID to close the gap on Apple and its iTunes music store, Napster is giving away an MP3 player worth about £30 to all new subscribers to its song-download service.

Napster is offering the 512MB version of a Sandisk music player, capable of storing about 240 songs. Customers will have to take out a three-month subscription to Napster to Go, which costs £14.95 a month.

The company is keen to encourage a parallel with the mobile-phone industry — where the hardware (the handsets) are often available free to those who sign up for a service contract.

Leanne Sharman, Napster’s UK general manager, said the fast-growing digital-music business was set to develop in the same way. “The mobile industry is more mature than ours but it began as a pay-as-you-go business reliant on handset sales,” she said.

“Now it's subscription that drives the business and allows the network carriers to give away new phones. This is the model for the future of the digital-music industry where content is king and MP3 players are disposable.”

Today’s Napster emerged from the legal wreckage of the original music-sharing service of the same name. It was the first of the file-sharing services that enabled hundreds of millions of songs to be illegally downloaded over the internet, costing the music industry a fortune in lost sales.

Although the company that acquired the brand turned it into a legitimate business, it lost its early leadership in digital music to Apple, largely because of the appeal of the iPod.

Napster believes that the current dominance of the iPod and the iTunes store that it supports will prove to be transitory. Sharman said: “Younger consumers are very fickle. You cannot have loyalty to a particular brand in that environment. More and more of the younger audience are buying flash-based MP3 players for £30-£50 — more disposable than a £250 iPod.”

Napster is promoting a subscription service where consumers “rent” music rather than buy it, song by song. This enables consumers to download as much music from Napster’s 2m-song library as they wish. Although potentially cheaper, the drawback is that customers will lose access to “their” music if they ever stop their subscription.

In Britain Napster claims to have attracted 1.5m users since launch in May 2004. These have “consumed” 175m songs (which includes tracks simply listened to from its website as well as those downloaded to a music player). The American-owned firm remains loss-making, although it now generates revenues of over $100m (£53.6m) a year — still a tiny fraction of Apple’s music business.

Apple is expected this Tuesday to launch a new video store, making films and television programmes available from iTunes. The Apple rumour mill suggests that this will be accompanied by an improved video iPod, as well as new versions of the top-selling iPod nano.

Apple’s line-up of media partners is expected to begin with Disney. Steve Jobs, Apple’s chief executive, is a director of the Walt Disney Company, having sold Pixar, the animation studio responsible for Toy Story, to the group last year.

Other speculation about this week’s Apple announcements centres on the long-mooted iPhone. Mobile phones, such as the Sony Ericsson Walkman range, can increasingly be used as digital-music players, and analysts believe Apple needs to introduce its own product to counter the threat to the iPod.

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