08/04/2006, 10:55am, EDT
Friday, August 4th
Napster loses subscribers, future uncertain
"Napster's still trying to find a working business model, which is bad from an operating standpoint. But we see an increased likelihood the company will consider a sale, especially since management mentioned it on the call," said Kit Spring, analyst with Stifel Nicolaus & Co Inc.
The company reported a loss of subscribers in higher education. As of June 30, Napster's total subscriber base was 512,000, including 4,000 university-paid subscriptions; however, excluding university, the number of paid subscribers grew 26 percent year-over-year.
Despite a rise in revenue, Napster reported a net loss of $9.8 million for the first fiscal quarter compared with a year-earlier loss of $19.9 million, according to the report. Napster's revenue increased from $21 million to $28.1 million.
Filed under: industry
Other story tags: digital music/video
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Well... it's obvious. Simply stated, when a company is for sale people consider buying it as long as it has promise or capital for pennies on the dollar. And Napster neither has promise or a lot of capital. So, then... can't ... ahhhh... well.. oh never mind.
Example - Real's Harmony has gone into jukeboxes, a brilliant business model, and perfectly suited to a subscription model. A brilliant business model to leverage the resources they have. Great software on those jukeboxes, too, and anywhere they are, they are constantly playing.
Napster could have done the same - but refused. Furthermore, Napster could have embraced the Mac users, by at least not shutting them out - instead, Mac users were a running joke with management, and only recently (under increasing pressure) were Mac users even 'allowed' to access parts of Napster, instead of being shut out with a 'go away' screen.
Lastly, Napster's business model (if you want to call it that) is classic bait-and-switch, trying to sucker people into the demo subscription, and then making it as hard as possible to unsubscribe, kinda like the health club of music stores.
It's not that Napster is losing subscribers - it's that they finally have to admit they are, amidst their phenomenal financial losses that seem to have no end to them...
So, recalling their failed advertising campaign - yeah, Napster, I did the math -- and so do any potential suitors.
I am SO AMUSED by clueless business types that believe that ANY WORD that is on the public's lips a lot therefore has value even if you change EVERYTHING about said concept.
Napster meant FREE MUSIC FILES to everyone who used it. Nothing more, nothing less. You can't change that "business model" and have the word "Napster" mean anything, so there is NO WAY to make money off of it except by an AD-SUPPORTED free service. Period.
buh-bye, Napster.
bad karma to those who disrespect their experienced elders (jobs)