Who will own Napster III?
p2pnet news view | Music:- Spare a crocodile tear for Chris Gorog.
He’s the guy who, “predicted he could make a hit out of a legal version of Napster,” says Fortune.
“That was back in 2002 when Gorog was CEO of Roxio, a CD-burning software firm,” says the story.
“He’d just struck a deal to acquire the insolvent Napster’s assets – including its name and iconic kitty logo – for $5 million. Gorog renamed his company Napster and launched a paid music subscription service, insisting the brand alone would draw millions of customers.
It continues »»»
Well, that didn’t happen. Today, Napster, headquartered in Los Angeles, has only 760,000 subscribers who pay about $13 a month to listen to its library of 6 million songs. The company has never been profitable. Napster lost $16 million in its most recent fiscal year ending in March on what it described in a press release as ‘record revenues’ of $127.5 million. Wall Street has pretty much given up. Napster’s stock price has fallen 69% to $1.44 in the 3 1/2 years since its re-launch.
Now the situation is about to get more absurd. The 55-year-old Gorog, who declined comment, is trying to fend off a proxy campaign bankrolled by Kavan Singh, a 26-year-old entrepreneur who owns, among other enterprises, a chain of Cold Stone Creamery ice cream stores. Singh and two other disgruntled investors, all enthusiastic Napster subscribers, are vying for board seats at the company’s Sept. 18 annual meeting.
Napster II has been an unfunny farce ever since Gorog/Roxio bought it, convinced the name alone would be sufficient to draw throngs of paying customers to what he ultimately turned into a complete mockery of the original.
Vivendi Universal, EMI, Warner Music and Sony BMG and their RIAA got right behind it, trying to use it to grease their ‘product’ into universities across America.
That didn’t work either and since then, it’s been one thing after another with the mainstream media faithfully parroting every bit of PR hype as though it was genuine news.
But even that didn’t do any good and today, Napster isn’t even a joke.
Its shares have plunged 95 percent in six years, said Bloomberg News recently, pointing out it’s now “takeover bait” for hedge funds, “zeroing in on a cash hoard exceeding the company’s market value.”
Napster hasn’t posted a profit in four years and its $69.8 million in cash and investments as of March 31 eclipsed the shares’ $52.1 million value, said the story.
However, the name is still worth a few dollars and the question now is: who’ll be the next owner?
“The most obvious potential buyer is RealNetworks, which declined to comment,” says Fortune, adding dryly, “But perhaps RealNetwork’s CEO Rob Glaser should wait until Napster’s shares fall a little more.
“Haven’t we all learned what happens when you invest too much in a famous name?”
.
.Stumble It!
Fortune – Napster 2.0’s sad song, July 28, 2008
Bloomberg News – Napster Takeover Looms as Funds See Cash Exceed Stock, July 21, 200
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July 29th, 2008 at 6:44 pm
Here we are:
Ted “Series of tubes” Stevens, the longest-serving Republican senator in US history, has been indicted on seven counts of criminal charges related to business deals in his home state of Alaska.
July 30th, 2008 at 2:51 am
If they want it to be successful they need to change it into a free service like it was. 760,000 subscribers? 1000 times more than I would’ve suspected. Mr Gorog apparently doesn’t live in the real world. Though he also produced burning software, but also thought people would pay for it rather than acquire free serials? You expect people to pay for every bit of data on top of ISP charges, then you need to price realistically and not fleece the poor.
July 30th, 2008 at 3:49 am
So, they got $127.5 million , but they spent $143.5 million? Wow, that’s a lot of expense. Don’t get me wrong, i’m a little in this business, and even i can run that company for $10 mil easily. They must be paying their CEO too much.
July 30th, 2008 at 9:51 am
They should sell it to The Pirate Bay.
July 30th, 2008 at 11:00 am
sell it to yahoo. they’ll know exactly how to kill it off forever. then they can issue refunds to these music renters as well as the yahoo music renters.
then hopefully yahoo will be bankrupt and they’ll finally go away forever, too.
December 24th, 2008 at 12:00 am
They are upsetting customers right and left and then you have to call an 800 number to cancel and they put you on hold forever. Plus, you have to pay per track to burn the song to CD so you might as well use iTunes.