Napster's all-MP3 launch reflects an interesting E-Commerce trend. Although pure entertainment plays like Napster, Netflix and Blockbuster will likely be content with the healthy profits of downloadable multimedia (Blockbuster will likely be thrilled with any profit, but that's another story), it's the Sears and Amazons of the world that see entertainment as a way to lure in younger consumers, to set up much more expensive purchases down the road. But unlike similar historic strategies, the entertainment downloads are anything but loss-leaders.
To use a chess analogy, many e-tailers today see the strength of their multimedia entertainment offerings as akin to controlling the center of the board. On top of recent moves by Sears, Blockbuster and Netflix, Napster on Tuesday (May 20) announced what it dubbed the world's largest music download site, with some 6 million selections.