Ashlee Vance, writing for The Register, reports that, despite the inroads it has made at many universities and colleges, Napster has failed to turn those gains into sales. University of Rochester provides "all you can eat" Napster subscriptions to its students, but a survey it conducted found that during the fall 2004 semester, none of its students purchased a song through the service if it was also available as a streaming or tethered download, while just 2% bought a song if it was one of the service's buy-only offerings.

Meanwhile, 8% of the students still turned to another service to buy a song even when they could obtain it through their Napster subscriptions, while 39% of them went elsewhere if the song was a buy-only selection. If the song they wanted couldn't be found on Napster at all, 52% of them used a different service.

343 students responded to the survey; of them, 56% used services other than Napster. The iTunes Music Store was the most popular as the choice of 71% of the students who used other services, with miscellaneous services (Direct Connect, Kazaa, LimeWire, WinAmp, RealPlayer and WinMX) used by 29% of them. MusicMatch was third at 16%.

When students did find subscription songs they liked, 47% of them added it to their streaming playlists while 39% obtained it as a tethered download, which means they could add it to their MP3 players' libraries and listen to it as long as their subscriptions remained active. Four percent of them did nothing, a category that jumped to 48% and 31% when talking about buy-only songs or tunes not available through Napster.

Ms. Vance notes that Napster has provided the subscription services to schools at heavily-discounted rates, with the Recording Industry Association of America rumored to make up the difference. She points out that Napster also subsidizes non-iPod hardware makers -- both strategies likely had a lot to do with the US$24 million loss reported by the company last quarter.