Napster song sales hit 5m

Some way to catch up with Apple

By Tony Smith, 24th February 2004

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Napster has sold over five million songs since the once infamous file sharing software company was relaunched as a digital music store last October, it said yesterday

The operation, a subsidiary of CD-burning software company Roxio, also forecast it would yield $20m in music sales during its first year of business.

As a Windows PC-only service, Napster claimed it was the first such company to reach the five million download milestone. By contrast, Apple's cross-platform iTunes Music Store reached 25 million downloads early last December, though ITMS has of course been running since April 2003. Windows users were welcomed into the fold in September.

That yields a (rough) average monthly download rate of 2.78m songs - Napster's rate works out at 1.25m songs a month, so it has some way to go to catch up.

It hopes its co-operative deals with US universities will help. It has already signed up Pennsylvania State University and the University of Rochester, and claims to be "in negotiations with a number of other institutions across the country". The deal essentially provides students access to Napster's bulk-buy Premium service for free - the universities pick up the subscription fees.

Other schemes have proved less successful. According to the San Jose Mercury, citing "sources familiar with the agreement", HP had intended to partner with Napster for its own-brand music store but pulled out of the deal just before the new Napster service went live. In January, HP announced instead a partnership with Apple.

Roxio laid off a number of workers at Napster this month, following a January reorganisation intended to consolidate the company's various operations: a clear cost-cutting move. In the process, it saw the departure of Napster President Mike Bebel, to be replaced by Brad Duea.

According to the San Jose Mercury report, Napster lost $15 million in its first two months of operation. Sales figures provided to two of the major music labels show Napster has taken around 12 per cent share of the download market, compared to Apple's 56 per cent. ®