Mi lesz veled Napster?

2007. május 20. - Pléh Dániel

Napster continued to burn cash during the most recent quarter, though revenues and subscribers both increased aggressively. During the Wednesday call, the company revealed record revenues of $29.1 million, up 9 percent from $26.8 million during the prior-year quarter. Meanwhile, subscribers skyrocketed, thanks to a major acquisition involving AOL Music Now. The Music Now subscribers transitioned to the Napster service in March, boosting overall levels to 830,000. The tally also includes university subscribers, Napster Mobile subscribers, and Napster Japan subscribers.

Both revenues and subscribers showed healthy increases, though losses remained an issue. For the period, the company lost $8.5 million, far broader than a year-ago loss of $4.4 million. The change is glaring, though Napster pointed to a one-time gain during the year-ago quarter of $5.4 million related to the sale of its consumer software division.

A broader analysis involving multiple quarters offers a more balanced comparison. For the year ending March 31st, Napster lost $36.6 million, less than a previous-year tally of $54.9 million. Meanwhile, cash reserves continued to decline. The company ended the period with a total of $66.5 million in cash, cash equivalents and short-term investments. That represents a 17.8 percent decline from figures of $80.9 million recorded at the end of 2006, and a 35.4 percent dip from year-ago reserves of $103 million. Referencing the softening rates of decline, Napster chief Chris Gorog painted a steadying picture. "Napster concludes fiscal 2007 as the most popular on-demand music subscription service with healthy annual revenue growth and a significant decline in cash burn," Gorog said

 

Napster and Motorola recently unveiled a broad-reaching alliance, one that focuses on portable subscription offerings. The move represents a shift by Motorola away from a previous tie-up involving iTunes, a relationship that failed to ignite consumer imaginations. The revamped team will jointly promote Napster To Go, a concept that allows music fans to enjoy subscription-based collections from portable devices. Marketing efforts will be focused in the US, UK, and Germany, according to information received Tuesday. The pact coincides with the release of the Motorola Rokr Z6 and Z6m, both optimized for Napster access, though a broad range of other Motorola devices are also compatible. An initial component of the marketing alliance involves three-month Napster To Go trials, a nice perk for new device buyers. A number of other retail-oriented initiatives are also being constructed, according to the pair. "Motorola's powerful global brand image, music-enabled handset portfolio and exceptional market positions present tremendous potential for Napster to further deepen and broaden its global presence," said Chris Gorog, chairman and chief executive of Napster.

Subscription-based music platforms have mostly been met with lukewarm reception, though a mobile component could change that reaction. Theoretically, access to immense amounts of on-demand music trumps experiences offered by iPod+iTunes, though a critical psychological component related to ownership could stunt the effort. For starters, a Napster To Go account costs $14.95, and termination of the account causes tethered downloads to go poof. Meanwhile, others are also tinkering with mobile-based subscription portability, including Yahoo Music. The company, which has also experienced lackluster uptake on its Unlimited subscription concept, brokered an alliance with Cingular in November of last year. Ironically, that deck is also shared by Napster, part of an ongoing horse race.

 

 

  Ericsson and Napster recently grabbed an exclusive music distribution deal with Swisscom Mobile, according to information received this morning.  The deal will position Napster Mobile, a joint venture between Napster and Ericsson, onto Swisscom decks starting this week.  The Swiss mobile operator is blitzing the full-track service with a series of local advertisements, according to the group.  Napster Mobile offers a collection of roughly three million songs, and a selection that includes harder-to-find independent material.  The service also includes a number of personalization options, and metadata extras like artist images.  "We are very pleased that Swisscom has selected Napster Mobile as their mobile music service and look forward to providing the more than 4.6 million Swisscom Mobile subscribers with a music experience that really delivers," commented Stefan Koetz, country manager at Ericsson Switzerland.

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