Feeds

Napster's Q4 loss swells as costs surge

Renting music ain't easy

  • alert
  • submit to reddit

New hybrid storage solutions

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

New hybrid storage solutions

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.