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Napster reports wider loss, subscribers at all-time high

17 May 2007 9:19 by James "Dela" Delahunty | 9 comments

Napster has closed its fourth quarter with subscribers to its music rental service being at an all time high but with a widened loss during the quarter due to the impact of a one-time gain in the same quarter of the previous year. The company reported that its net loss was $8.5 million, about 20 cents per share in the period that ended March 31, compared to $4.4 million, or 10 cents per share in the same period a year before.

Revenue rose 9 percent to $29.1 million, compared with $26.8 million in the same quarter last year. The company's shares fell 15 cents, or 3.7 percent, in extended trading after they rose 9 cents to $4.07 in regular trading Wednesday. Napster Chairman and Chief Executive Chris Gorog said that the company was in its strongest position since launching.

"As we head into fiscal 2008, we are acquiring customers cheaper and keeping them longer. We are growing revenues while reducing expenses. We are attracting more world-class partners than we ever have before," Gorog said. Napster closed the quarter of a subscriber base of 830,000 which includes 225,000 former AOL Music Now users and University users.

The number of paid Napster subscribers rose 37 percent from the same quarter of the previous year. For the fiscal year, the company reported a net loss of $36.8 million, or 85 cents per share, compared with a loss of $54.9 million, or $1.28 per share, during the previous year while total net revenue increased 17 percent to $111.1 million from $94.7 million in fiscal 2006.

Napster has struck several important deals recently with AT&T Inc., Circuit City Stores Inc. and Motorola Inc. The deals will help the company cut back on marketing dollars and help drive new subscribers to its service. Napster is also banking on adding more subscribers as the number of music-enabled mobile phones grows.

Source:
Yahoo

Permalink to this article

Motorola drops Apple and replaces with Napster (15 May 2007)

Napster gathers lots of subscribers (4 April 2007)

Napster and AT&T in music deal (26 March 2007)

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Discuss this article!
webe123 (Inactive) 17 May 2007 9:37
To me, anyone that uses a service like THIS watered down version of the original deserves what they get! There is NO WAY I would use this piece of junk! [ + quote]
SProdigy (Member) 17 May 2007 10:59
By "watered down" do you mean legal? [ + quote]
jetyi83 (Member) 17 May 2007 11:23
watered down? that makes no sense. and yes people that use this service do deserve what the get; the best legal alternative to music downloads. looks like napster is strong and growing. [ + quote]
jetyi83 (Member) 17 May 2007 11:23
double posted on accident [ + quote] This message has been edited since posting. Last time this message was edited on 17 May 2007 11:23
webe123 (Inactive) 17 May 2007 20:11
No, by "watered down" I mean the ORIGINAL Napster...this new version is watered down and it DOES make perfect sense! Seems people forget that there was a Napster that started way before this with no DRM and free tunes. [ + quote]
webe123 (Inactive) 17 May 2007 20:12
Originally posted by jetyi83: watered down? that makes no sense. and yes people that use this service do deserve what the get; the best legal alternative to music downloads. looks like napster is strong and growing. If you really believe what you are spewing I feel sorry for you. Napster is NOT the best "legal alternative" by a far stretch! [ + quote] This message has been edited since posting. Last time this message was edited on 17 May 2007 20:13
borhan9 (AfterDawn Addict) 17 May 2007 20:29
Quote: Napster has closed its fourth quarter with subscribers to its music rental service I never knew it was rental what does that mean the song will not work after 30 days. Kinda weird. [ + quote]
SProdigy (Member) 18 May 2007 8:16
All subscription services, such as Napster or Yahoo!, will allow you to download DRM protected songs to a supported device for a monthly fee. Within that monthly fee, you have in fact, "rented" the music for one month. Each month that you pay, you have "renewed" the rental. The DRM is renewed for each month until you don't pay, and then the music cannot be played. Of course, if you pay .99 cents or so for each song, then it is locked with DRM that does not have the "rental" policy attached, and the song is yours to keep. You will still need to be authorized to play all "rental" music on the system you are using. Okay, DRM sucks, but subscription music is not terrible, nor is paying .99 cents for a song. My reasoning is that you can take $15 you could pay for a CD that only has 1 or 2 "hits" and instead spend that money on 15 "hits" online and still burn it to your own CD or transfer to a supported player. It's cheaper that buying the CDs and all of the music is ripped at the same consistency and format, and for the most part, completely and properly tagged. If you use the same service all the time, ie. Napster, you will have a much cleaner and organized music library over a period of time. If you're smart, you already know a way around the DRM and every penny spent on Napster makes it worthwhile. Or you can just take a jog to the local library, borrow some CDs, and then rip them to your PC. Forgot to mention that you can stream any song in the library, sometimes those not available for download, at anytime with these apps. [ + quote] This message has been edited since posting. Last time this message was edited on 18 May 2007 8:17
Unfocused (Member) 19 May 2007 18:30
They should do what Netflix and Blockbuster did. Lower the price and watch the customers flock towards them. [ + quote]