More $ problems for Napster
p2p news / p2pnet: Spin, spin, spin. That’s what it’s all about for the disinterred Napster as it strives to present an image of itself as a dynamic, progressive company with a future.
However, all it has to offer is a past – and it’s not even its own.
It posted net losses for the fiscal second quarter and now, "Some analysts have expressed concerns about the company’s financial position and its ability to sustain continuing losses," says the BBC.
Roxio, now Napster, bought what was left of Napster for a mere $5 million in 2003 and ever since, has been trying to convince the world that an extreme makeover has successfully turned it into a viable online music service.
The Big Four record labels did their part, introducing it into US universities, and the mainstream media have hyped every announcement of a ‘new’ offering shamelessly.
But the 99.99999% of the people who matter, the online music buying public, have ignored it from day one.
These days, Napster is trying to rent out product supplied by the Big Four record labels, claiming there’s a, "strong demand for its subscription service" and that it’s, "on the path to profitability" despite seeing its losses widen further, says the BBC, going on:
"The firm made a $16.7m (£9.5m) loss in the last quarter, up from the $14.9m reverse in the same period last year."
Isn’t a loss something a business ’suffers’ rather than ‘makes’?
However, "Napster said it was upbeat about its prospects for 2006, in which it will offer a new free music ‘experience’ through its website," says the BBC, quoting chairman and ceo Chris Gorog (right) as saying, "We believe the prospects for our new Napster.com initiative, the robust organic growth of our subscription business, together with our focus on cost controls will all contribute to accelerating our path to profitability."
Napster’s sales increased only marginally to $23.5m over the three month period to the end of December, says the BBC, although they were 94% higher than a year ago.
Also See:
net losses – Is Napster on its death bed?, January 20, 2006
BBC – Napster upbeat despite new losses, February 8, 2006
February 9th, 2006 at 1:37 pm
The problem with Napster is its “ease of use”. I was a member of its subscriber service for two months and after the first month, one of my two computers started giving me license problems (DRM related). I sent an email to Napster support and it took them over two weeks to respond, and the recovery steps in their email were not trivial. They involved re-installing Windows Media player, and then doing other steps to go into folders and rename drm files and re-sync my library. These steps fixed my files I downloaded from the subscription, but the worst part was that the recovery steps from Napster did not fix the licensing problem with the songs I purchased! Luckily, I had already burned them to a CD. Nonetheless, I let my second month subscription run out. The subscription service was great, but it was a hassle.
My conclusion is that the compilications of their DRM are killing them. I’m an experienced computer user, but I can’t imagine a mom or pop trying to mess around and understand the DRM/licensing restrictions. As long as iTunes can guaratee ease of use, then they are going to kill the competition. I’m out…
February 9th, 2006 at 10:31 pm
Napster knew it had a problem when it introduced the rental idea. They knew it would be a hard sell from the beginning to create a market from rentals. They have not been successful in selling their idea of why to rent music. Doesn’t matter how much to rent, it is never yours. It’s an unending payment plan and the hope is that it will be a continual money maker only if the buying public embraces it.
Unless Napster can convence the buying public it is a good idea with something like a “coolness factor” included it will never be much of a success. Anyone that buys into this rental package and is in good standing with them by being up to date with their payments stands to suffer the same problem as those that aren’t. Namely if the company goes under then so does the music that every one rented.
DRM is making a bad name for itself with just reason. No one but the cartels like it. In the end that making it hard for the customer to use his purchased products leaves that customer with a vague unsatisfied feeling that it isn’t worth the hassle of buying. When customers walk away not feeling happy with the purchase, it spells long run problems for repeat business. That’s something that the business can not afford to ignore and continue on it’s merry way.
February 20th, 2006 at 1:42 am
Sounds like p2p is very short NAPS, and trying to protect its own interest. Public should read stories on stocks that p2p likes, and notice how the same ills are diguised as good spin, while NAPS are bad spin. Hhhhmmmmm. People should not act like the lemmings p2p thinks we are