Napster, the slow-dying music-subscription service born from the file-sharing startup's ashes, continues to lurch, corpse-like, at any business partner that doesn't flinch in disgust. Its latest shamble is a deal with AT&T to place its song library on mobile phones — at twice the price of regular downloads. AT&T backs the $1.99 price, saying that it costs a ton to transfer data files over the air. Somehow, I don't think consumers care about AT&T's bandwidth problems; the price point will likely make this partnership dead on arrival. Anyway, we're more interested in the other part of the Napster deal, which involves AT&T's broadband business. How, exactly, is AT&T going to promote Napster to AT&T Yahoo DSL subscribers without displacing its broadband partner's Yahoo Music service?

When Snocap and music retailer CD Baby ended their partnership earlier this month, Snocap made like it pulled the plug. But today CD Baby president Derek Sivers put out numbers that show why it's no surprise Snocap had to lay off 31 of its 57 employees. Its partnership with CD Baby only generated $12,000 in revenues.

Two weeks after Radiohead asked fans to pay only what they like before downloading their new album "In Rainbows," financial numbers are beginning to surface. So are the bloated carcasses of record labels. Why? Because though Radiohead will release the album on CD and with a label early next year, the band has—by all accounts—already cleaned up without having to share a pound.

Australians will miss out on yesterday's iTunes price cut. Add it to the list of antipodal deficiencies: properly arranged seasons, counterclockwise toilet flushes, and correctly pronounced consonants. [Sydney Morning Herald]

The ITunes Store is no longer charging a premium for its DRM-free songs, also known as iTunes Plus. Prices now match its current catalog of 99-cent singles, and users are no longer confronted by an annoying pop-up. The trivial observation to make is that Amazon.com forced Apple's hand by charging 99 cents for DRM-free MP3 files. But far more likely? Consumers made their disinterest in overpriced, annoying-to-download files clear by simply avoiding them, and Apple realized it had to cut the price. This, of course, doesn't bode well for record labels' plans to charge higher prices for hit songs. [Ars Technica]

Radiohead has stirred up a lot of hoopla with its name-your-own-price album download In Rainbows. Naturally, the curious wonder whether the do it yourself model can be transferred to videogames. The answer: no. Videogame developers and publishers are dependent on games sales — there's no equivalent of the concert tour or other sideline business where they can make money. Some independent studios are attempting to become their own publishers, effectively freeing themselves from a record label equivalent, but selling directly to consumers online isn't as easy as it sounds. Setting up a true digital distribution arm like Valve Software's Steam, is expensive — and that one is only for PCs. Console gaming doesn't yet have the storage capacity, business model, or open access to be a viable digital solution to retail stores, for which you need the backing of a large publisher. In other words, stop dreaming of getting away with paying a nickel for Halo 4. Master Chief wants you to pay up. (Photo by GameLuv)

News Corp. continues efforts to prove that it didn't pay $580 million for the Michael Bolton of social networks. Its latest tack: remaking MySpace into a true destination, not just a place for bands to advertise. Its latest attempt is a new licensing deal with Sony BMG that allows MySpace to stream music videos and audio from the label group's catalog in exchange for a share in sponsorship and advertising revenues. No doubt MySpace is trying to get a jump on the rumored Facebook music platform. No chance, of course, that it will first work on actually making the site navigable.

When all else fails, blame Napster. The file-sharing startup, in its first incarnation, pretty much gutted the music industry. The progeny it spawned has ruined the life of Minnesota single mom Jammie Thomas, who was fined a $222,000 fine for illegally downloading music. Now, reborn as a tedious iTunes wannabe, the company is ruining my morning with its latest bad idea. Napster 4.0 is a $10/mo. subscription service which ever so kindly allows users to access and play their music on any Internet-connected computer without downloading any software. The advantage, in short, is that you can hijack your friends' computers to play your own music. Tell you what, Napster: I'll keep my money and listen to Pandora for free instead.

Led Zeppelin is no longer "dazed and confused" by the MP3 world. It's capitalizing on a monumental one-night-only reunion by, at long last embracing song downloads — but through Verizon Wireless, not Apple's iTunes. Take it as another sign of the rising unease with Apple's dominance of digital music. The cell-phone carrier will sell full song downloads and ringtones of popular hits. The entire Zeppelin catalog and other partnerships will follow. [NYT]

First $150, then $129. Now, Woot, the deal-a-day online retail site, is selling the first-gen Zune for $99 to any suckers who overpaid the first two times. No refund this time either. [Woot]

Doug Morris, head of Universal Music, the most powerful of the four major record-label groups, thinks he has a plan to reclaim the music industry from Apple, maker of the iPod and iTunes. There are scant details and the plan is in flux, but the basic idea, dubbed Total Music, is this: All of the studios will pool their content for online distribution and share in the revenue. The service will be a subscription subsidized by any form of provider: device manufacturers, music stores, cellphone carriers, whomever. The consumer doesn't have to pay for a music service because it's baked in, the music industry finally gets the revenue stream that they've been missing. But we're skeptical.

Snocap may have started as Napster creator Shawn Fanning and bad boy Jordan Mendelson's baby, but we've heard both Valley hipsters have washed their hands of their failing creation. A tipster reports that Fanning is long gone and focused on his latest startup, Rupture, a social network for videogamers. Mendelson, too, is working on a new project and is likely to leave Snocap in a few months. As for the cause of the layoffs, a tipster says the CD Baby deal's failure isn't the proximate cause. Instead?

What led to yesterday's layoffs at Snocap, the digital-music startup founded by Napster creator Shawn Fanning? The breakdown of a deal last week with online retailer CD Baby, if not the proximate cause, was surely a signal of the startup's incipient meltdown. CD Baby is a music store that allows independent artists to sell their music at their own price, and Snocap's most significant partner besides MySpace. But, judging by the comments of CD Baby artists whose songs were being sold through Snocap's MySpace stores, that partnership has had little value.

A tipster reports that Snocap, the once-hot digital music startup from Napster founder Shawn Fanning and Silicon Valley bad boy Jordan Mendelson, has laid off 60 percent of its staff, and the company is up for sale. If true, it's not surprising, giving industry trends. Snocap was something of a second coming for Fanning; rather than fight the music labels, he aimed to help them release copy-protected files on peer-to-peer networks, so they'd get paid even if users shared files. But despite cutting a range of deals, the idea never really took off. And lately, the music industry has started to embrace the idea of doing without digital-rights-management software altogether. It's not clear who would want to buy Snocap, really. At any rate, this explains why we haven't seen Mendelson, pictured here in bubblier times, at many parties lately. Anyone hear more about Snocap's firings? Drop us a line.

The hype around Facebook's application platform has created a mad rush to grab potential riches, but like many a Forty-Niner, developers are bound to find mountains barren of gold. In the case of MediaMouth, formerly Digital Kiosk Technologies, they are staking their claim to the "First Music Store Inside Facebook." The only problem? MediaMouth's store is not what you would think.

It's time for the recording industry to embrace digital music instead of focusing on CD sales and cell-phone gimmickry (the ringle?). So says Guy Hands, CEO of Terra Firma, the new private-equity owner of EMI. About time someone said it. Radiohead leading the charge into "free" music territory with the digital release of its new album for whatever consumers are willing to pay for it, and others are following suit. EMI and other record labels risk getting cut out of the equation. The music industry needs a new business model, nowish. One suggestion by Hands: Instead of granting big advances, they should offer to subsidize recording costs in exchange for a stake in earnings.

Radiohead opened the floodgates to free music by offering users a digital download of its new album for as much (or as little) as they're willing to pay. It's a shock to a recording industry hell-bent on wrestling back the right to set prices from the likes of Apple. Now other acts are jumping onto the free-music band — ahem — wagon: Charlatan is already on board, Oasis and Jamiroquai are contemplating it, and Nine Inch Nails's Trent Reznor has been released from his recording contract, in theory allowing him to follow through on threats of selling his music on the cheap. [Techdirt]

Ian Rogers, general manager of Yahoo Music, told music execs it's time to quit whining, grow up, and get rid of digital rights management — the copy-protection software that's the bane of music listeners everywhere. In a deliciously ranty presentation, Rogers explains how record labels forced Yahoo Music to build an annoying music software client to ensure the industry stayed in control of the music. Yahoo, says Rogers, won't put up with DRM's inconvenience anymore. Rogers says he'd rather quit the digital-music business than keep frustrating his users. "I personally don't have any more time to give and can't bear to see any more money spent on pathetic attempts for control instead of building consumer value." Ah, there's the keyword: "value." Is this really a high-minded protest — or an artful negotiating tactic to counter labels' demands to boost prices on DRM-free music?

Radiohead's experiment in distributing In Rainbows, allowing consumers to download the album for free, highlights a growing problem in the music business: Kids these days, thanks to BitTorrent, don't think they should pay for music. As more independent acts follow Radiohead's lead, opting to make their cash touring, the record industry will struggle to find a new business model. Surprisingly, suing its customers actually seems to be working out . [Telegraph]

Anyone recall Rick Rubin's rant about digital music and how we need to sign up for a subscription service powered by cable providers — similar to the mumbo jumbo Bill Gates proposes for the Zune? Well, surprisingly, Time Warner Cable has taken Rubin's bait and jumped straight into the fray with Road Runner Music. For $9.95 a month, you get unlimited access to streaming music. It also will sell digital downloads through its store, and allow you to transfer files onto portables for an additional fee. With all these new entries into digital music distribution — real and rumored — it'll be interesting to see if Apple caves to market pressure and either allows flexible pricing on iTunes, as the labels have asked for, or a subscription plan, to stay competitive.