Napster will post a smaller loss for its fourth fiscal quarter than it previously forecast. The reason? Greater-than-expected subscriber growth has taken numbers paying for its music rental service to over 600,000.

This translates into quarterly revenue of more than $26m - at least 10.6 per cent up on Q3's $23.5m - and a "substantially narrower net loss than originally projected, the digital music distie said today.

The new subscriber tally includes customers who sign up through Napster's university-oriented discount scheme. At the end of Q3, it had more than 500,000 subscribers, up 66,000 on Q3. This time round, it has added roughly 100,000 more. The fourth quarter ended on 31 March. ®