Feeds

Napster's Q4 loss swells as costs surge

Renting music ain't easy

  • alert
  • submit to reddit

Intelligent flash storage arrays

Napster's loss nearly doubled during the fourth quarter despite a solid rise in revenue.

The music rental company brought in $17.4m during the fourth quarter - a 188 percent year-over-year rise. Napster's net loss, however, swelled from $12.2m in last year's Q4 to $24.1m this year.

Napster spent a whopping $16.3m on sales and marketing in the fourth quarter up from $3.4m last year. And, unlike rival Apple which makes billions on its iPod device, Napster was unable to turn a profit on hardware sales that arise from its partnerships with the likes of iRiver and Creative. Napster brought in just $322,000 in hardware and license revenue, while spending $445,000 to subsidize the business.

"Napster maintained its position as the most innovative and fastest growing online music subscription service by ending its first fiscal year with revenue of $46.7m and 412,000 subscribers," said Chris Gorog, CEO at Napster. "We recently delivered on our commitment to expand our service and grow our audience with the availability of our Napstertones mobileproduct, which makes the hottest ringtones and exclusive Napster graphics and wallpaper available to almost 70 million cellphone users in the US."

Napster's net loss for the full year was $51.4m - up from a loss of $46.4m in 2004.

Napster expects "modest growth" in its first fiscal quarter of 2006, pegging revenue to come in between $19m and $21m. A slowdown in internet usage and lack of sales to university students during the summer months were cited as reasons for the cautious outlook. ®

Bootnote

Don't forget to enter our "Biting the Pigopolists" contest. There are just a few days left!

Related stories

Yahoo! declares! digital! music! price! war!
Apple iTunes sales sail past 400m
Mashboxx opens beta test scheme
Hong Kong scouts gain IP proficiency badge
CD Wow! enters download biz
RealNetworks sneaks a profit
Revamped Real music service aims at Napster

Beginner's guide to SSL certificates

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
What a Mesa: Apple vows to re-use titsup GT sapphire glass plant
Commits to American manufacturing ... of secret tech
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.