Napster's music service is part store, part radio, and attractively cheap. They know it'd be great on the iPhone, so much so that they've written an app—but they're not submitting it. Predictably, it's the money.
The story comes packaged in an announcement about m.napster.com, the company's new web-based mobile music store. It's strictly for downloading tracks, not streaming them, which is why it won't work on the iPhone:
iPhone users can use m.napster.com and song credits to purchase songs, but the songs purchased are sent to the PC only as Apple does not allow 3rd parties to download songs "over the air" to the iPhone.
This is obvious: Apple doesn't allow iTunes competitors in the App Store, or through a web interface. But what about a radio app? Weren't you guys working on one of those?
Well, Napster has created an iPhone application that allows subscribers to stream music on-demand to their iPhone-including personal playlists, albums and radio stations. You can imagine the company is also looking at streaming applications for several other mobile platforms as well (Blackberry, Android). However, due to the high licensing fees for streaming to a mobile phone, Napster has not yet submitted the iPhone app to Apple for approval or attempted to bring the application to market.
Maybe it's just an effort to keep the service cheap, but I'm sensing the beginning of a fight here. App like Spotify, Rhapsody and Napster, granted there's an available data connection, instantly make your on-demand library phenomenally massive, and make buying music feel a little dumb and like a waste. Now, people buy music to put on their iPods. The day they don't need to is a day the people in charge of setting the exorbitant streaming fees are not looking forward to, at all. [AllThingsD]