Napster brings a 5 million-song catalog to AT&T with extended deal

AT&T Inc. (NYSE: T) has extended its relationship with internet music provider Napster Inc. (NASDAQ: NAPS), according to Billboard. The new deal makes AT&T the ninth wireless provider to use Napster and includes "over-the-air, full-song downloads" and customer access to Napster's entire 5-million song catalog. With prices of $3 per song and $7.50 per five-pack, customers will also be able to download songs purchased with their phone onto their computer, provided they download the Napster software. However, a subscription service allowing customers to pay a monthly rate for unlimited downloads will not be offered in the new deal.

The Napster deal is the latest in a string of deals for AT&T that increases the amount of music and related media customers can access from AT&T phones. Billboard comments "the move puts AT&T on par with competitors Sprint (NYSE: S) and Verizon Wireless (NYSE: VZ), both of which have offered a full-song download service for close to two years now."

Last month, AT&T made a separate "over-the-air" deal with eMusic to bring Digital Rights Management-free songs to phones. Napster becomes the second "o-t-a" deal for the company, bringing the largest catalog but no DRM-free.

It's no surprise that AT&T would increase the amount of content offered, especially to better compete with other wireless providers. The only drawback seems to be pricing and the lack of a subscription-based service. Of course, a subscription service would curb those high prices, but limit profit for either company in the new deal. The $3 tag for songs on the phone hardly competes with the same tracks online or in other digital music stores, and both eMusic and Napster offer $9.95 subscription services online. In any case, this is a smart move because it does offer more content on AT&T phones and allows the company to compete with other wireless providers directly.