Feeds

Napster pays plenty for modest growth in Q1

Kitty eyes Japan

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

As promised, Napster delivered modest first quarter growth while its costs swelled. In addition, the company today announced plans to launch a version of its music rental service in Japan.

Napster brought in $21m during the first quarter. That's a a 167 per cent jump over the rather feeble $7.8m in revenue posted in the same quarter last year. Napster characterized the gain as modest growth and managed to hit the high-end of a forecast provided in May.

Rather distressingly though, Napster's bottom line continues to suffer from its advertising heavy, subsidy-based business model. It reported a net loss of $20m or a loss of 46 cents per share during the first quarter, which compares to losses of $7.6m and 22 cents per share last year.

CEO Chris Gorog did his best to put a positive spin on the session.

"Napster continues to make strong progress as we recorded our fifth consecutive quarter of double-digit revenue growth and signed significant strategic partnerships with some of the world's leading technology companies including XM Satellite Radio, Ericsson and Dell," he said. "These partnerships continue to validate the global strength of the Napster brand and are critical building blocks as we grow our business and enable users to access Napster beyond the PC through an increasing number of MP3 players and via cell phones."

The deal with Dell at college campuses provides one example of Napster's willingness to sell its service at a huge discount in the hopes of attracting future full-priced customers. So far, consumers have not flocked to DRM-laden rental stores as the likes of Napster, Real and Yahoo hoped.

In Japan, Napster will team with Tower Records Japan - a larger music retailer - within the next year to operate a joint-venture. Napster Japan follows similar services available in the US, UK and Canada.

Napster's content revenue hit $20.7m during the first quarter, which compares to $6.7m last year. Hardware revenue from various deals tumbled to just $250,000 from $1.2m last year. Meanwhile, sales and marketing costs skyrocketed to $16.2m from $4.3m. ®

Related stories

Hollywood sock-puppet senator faces tech insurgency
University bans iPod adverts
File sharers 'spend more on music downloads'
Global music download stats spill beans on subscriptions

Beginner's guide to SSL certificates

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

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.
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.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
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.