Napster ups revenue forecast

Subscriber growth

Napster expects to report revenues of $15m for the current quarter, $1m more than it previously forecast, the company said today.

The digital music company attributed the gain to "exceptional demand" for its subscription services, in particular Napster To Go, during the fourth quarter, which ends 31 March 2005.

We'd hope there was some increase in demand given the amount the company is paying to encourage this "robust growth". It has committed itself to spending $30m to promote NTG, its most profitable offering.

NTG allows subscribers to download any number of tracks and copy them to a portable music player. The service costs $15 a month. Napster's 'standard' $10 subscription service simply provides unlimited downloads - transferring tracks to a portable device costs extra.

With either package, should you stop paying the subscription, the songs stop playing.

Company chairman and CEO Chris Gorog also pointed to the contribution of compatible-player makers, in particular South Korea's iRiver, which recently ran an promotion in partnership with Napster. Windows Media-supporting hardware vendors and music providers are increasingly looking to build such relationships the better to compete not only with other firms in the Windows Media market, but with the more tightly integrated Apple iTunes Music Store-iPod offer.

Apple this week said some 300m songs have been bought through ITMS.

Napster lost $16.4m during Q3 FY2005 on revenues of $12.1m, but it took its subscriber base to 270,000 during Q4 calender 2004, up 90,000 on Q3 2004's total. ®

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