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Gasp, Shock and amazement.

Butttttt.... I thought this was the iTunes killer...?

Shocking news! LiesForSure!

But my mate Steve Ballmer told me Subscriptions were the future???

"Butttttt.... I thought this was the iTunes killer...?"

It is. But it was iTunes that was the killer.

You can't swing a dead cat without hitting iTMS victims : )

I think that what will happen next is that Microsoft will buy Napster and use it as its flagship music store. Napster is still a very recognized and popular brand name. MS can pump a lot of money into it to try to get it to be the de facto music store. I'm sure that's what Napster is hoping for.

Someone find a bugle horn.

At least no one will lose their music since they never owned it to begin with.

If Napster does go belly up, think about all the suckers who bought into the "Do the math" campaign and have been paying monthly subscription fees with the assumption they would have access to all their music as long as they kept paying the monthly rental fee.

Do the math indeed.

I wonder what those advocates of Napster will do once they found out their "unlimited downloads" won't playforsure anymore. It's a bit like trying to get warranty service for an off-the-truck special.

MW: somewhat. Napster customers are somewhat misled.

When they sold Roxio and went full steam into Napster, I knew they were makin' a big mistake. I wonder how Roxio's doing?

Jb

Yep. There goes all your subscribed music. let this be a lesson to everyone...

Seems to me this has got to be good news for Real. Unfortunately. But good otherwise.

Did Real Networks actually make a profit in 2005? Could be they're next in line.

There goes the doughnut budget.

Apple should buy 'em. Then give every subscriber an iTunes account with a credit equal to the amount they spent at Napster to subscribe for however long they did.

Convert all those subscription users to purchasers with a little cash and good will.

but only grandfathered in.

MS will buy the rights to the subscriptions that already exist. They wont allow all those customers to "hate" Napster and MS for the broken DRM'd Windows Media files.

Napster will close but the subscriptions will be honored by MS

Look at Napster's revenues (blue line) and losses (red line) over the last quarters:
http://www.2manage.de/managementchannel/wp-content/profit_napster.gif

Blimey!

Second try:
Napster's revenues and loss

Oh well explains why HP didn't go back to there after shunning them for Apple at the last minute.

If the business model for WiMP (Windoze Media Player) files on Janus DRM subscriptions works, then how is it that nobody is making any money on it except Micro$oftopoly?

If I had been an owner of Roxio when they sold off all their profitable operations and bought the Napster name and launched this train-wreck of a business, I would sue the CEO & Board for everything they have.

From WikiPedia
'In many common law jurisdictions, fiduciary is a legal term used to describe a relationship between a person who occupies a particular position of trust, power or responsibility with respect to the rights, property or interests of another...
The nature of fiduciary duties is especially relevant in the field of corporate governance. Members of the board of directors or the officers of a corporation may owe fiduciary duties to its shareholders, as defined by the law of the state of incorporation.'

I think they have failed on every count.

Who would want that Napster piece of dung?

Real Player!

Great, put two small turds together and what do you get?

A really big turd (that can't be polished).

More blood on the iPods clickwheel (I love saying that)!

Dirt-Napster

FUD? Maybe, but it looks like poor old Napster has earned this month's Beleagured Award.

I don't think M$ will buy them, but I can see one of the big record companies snapping them up for next to nothing.

If your business model is the more you make, the more you lose, then you will surely not be in business for too long. I never understood why investors were so forgiving of this company.

Circling the bowl, circling the bowl; hi-ho the merry-o, circling the bowl!

I have one windows user friend who uses Napster, not sure how she'll take this news.

Looks like Napster has more trouble brewing:

"MCS Music America, a Nashville-based company that administers copyrights for about 45,000 songs, claims Napster has put hundreds of songs controlled by MCS and its publisher clients on Napster.com without obtaining the proper licenses for paying royalties."

http://tinyurl.com/d2cks

Keep in mind that Napster's sugar-daddy, Microsoft, now has a new honey, the URGE service they're creating with MTV. Napster can no longer count on Microsoft to support them as the best chance of toppling iTunes.

Before URGE came around, I would have been certain that the Napster saga would have ended with the company being bought and folded into a much larger service portfolio. I would have had Microsoft on the short list of potential purchasers. But with URGE in the picture, that looks unlikely. Napster could end up just dying, "most recognizable brand" or not.

And iTunes has 83% of the download market? My memory may be rusty, but isn't that up from what it was? I remember numbers like 70-75% quoted.

There are a number of reasons why some of us might be interested in Napster's financial results.

Many might look on with a somewhat ghoulish fascination as it heads towards extinction ( or more likely towards buy out ), whichever way you look at it, I wouldn't reckon on Gorog being there for much longer.

But I'd be interested to discover exactly what percentage of their revenue gets distributed to the artists who's content is subscribed to.

Apple make no secret of where the money goes, something like 70% of the income ( not merely the profit ) goes to the artists, publishers and distributors. The costs are all born by Apple and they make a very tiny profit per sale.

I've yet to see a clear indication of what percentage Napster pass on. I once saw a reference to Napster paying 5% of the subscription as that's the same proportion as satellite radio pay on their subscriptions, but there was no source for that figure and I haven't been able to verify it for myself.

M$ could buy Napster to keep it going. After all, they won't need to make money from that operation, just keep it around to help their other businesses.

It will be interesting to see what happens to all that purchased music if Napster goes under. Subscribers know they are screwed - all that money spent to rent music will just evaporate overnight. But what will happen to those few individuals who actually downloaded tracks?

Short of Microsoft injecting cash directly into Napster's veins, I don't think the company is going to survive.

What goes around comes around. Napster's evil little empire of stealing copyrighted music and illegally distributing it is crashing down. As Stevo said, it's bad karma. Legal downloads is easier on the conscience. Thou shall not steal. Napster never learned that. Good riddance!

LordRobin makes a good point that MS has moved on with the URGE deal. I also wonder what obligations a purchaser would have to the subscribers? That is, if MS or someone else were to purchase Napster to acquire the name would they have some obligation to continue the service on behalf of the subscribers? Does the user agreement provide an out for the company?

Subscriptions are good for discovering music. So the subscriber spends all day consuming Napster's bandwidth discovering music, then hops over to the iTMS to purchase a bunch of tracks. Apple saves alot on bandwidth costs. Napster, please don't go!

Where is it...Hmmm I know it's here somewhere. Damn can't find it under genre. Maybe it's under classic. Nope, maybe dead guys. Not there either. Damn where is it. Oh I know...it's under planets. Bingo, there it is, Freddie Mercury and Queen. Click. Sound up.

Another One Bites the Dust.

No doubt the executives and PR people will deny the rumors until five minutes before they publicly announce it.

I worked for a medium sized company (Commercial Financial Services in Tulsa, Oklahoma) that went bust after some financial scandals in 1999. Officials and management vigoursly lied to our (their employees) faces for months, until they made their final announcment to us, via e-mail.

Hopefully, the people working in the trenches at Napster won't listen to their own spin guys and instead start working on updating their resumes.

mdn magic word-'poor'

Adios, suckers. Don't say we didn't warn yah.

Well of course they are dying thier market has been the poor students who just use Napsters rental service to rip off music wholesale (via the sound card or audio hijack) and then trade it with their friends.

Once they got everything they want with a one months subscription, they are gone.

Since selling music online makes little profit (as the labels take a huge cut) it's really a "loss leader" for the iPod.

So what chance in hell do those other players have against the iPod/iTMS combination?

They can't sell the music much cheaper, they don't have a iPod killer.

Heck they can't innovate nearly as fast or even get the flash RAM in sigificant quantities.

iPod integration is standard on just about all new cars, there is tons to third party devices tailored to the iPod configuration.

Apple sowed up the portable player market and it will continue to feed upon itself just like Windows feeds upon itself.

Wasn't there some stupid university of moronship that went Napster instead of Apple?

It's just a rumor. I just looked at NAPS financials, and they had $130M in cash and other liquid assets last quarter, and even if they lost more money than last quarter, they still should have plenty to burn.

I say this rumor is premature

Maybe Apple was right when it said there was no money in downloads (especially not if you have a tiny sliver of the market).

Yeah, that university is Penn State, I go there. I'm a mac user, and they still charge me 25 bucks per semester for Napster. The only reason they went with napster is because the ITS program independently controlls the computer networks on campus (seperate from the university at large) and Microsoft has it's fist so far up the department's ass, that it's hard to breath sometimes. It's funny, because the best school here is Architectural engineering (number 1 in the country) and they require a powerbook to be in the program, and for a while, the course websites wouldn't work because the ITS tried to put the entire university framwork on .NET (thank god saner heads prevailed and the MS cronies on campus lost a major battle:)

William Colsher: you beat me to it. We are! Pepsi State University. As a PSU mac user, I must say that overall, mac support for university services is pretty great, but paying that tech fee is pretty sucky. Even suckier is that I think I paid it at satellite campuses too, but without access to the service. This whole napster thing is fallout from the OMG-sue-users thing. Pouring money into Napster koffers is simply a way to say: see, we actively discourage piracy, so don't implicate us in your suit. It's security money, plain and simple. PSU has a LOT of money to be sued for, so they're trying to protect themselves. It's kind of a necessary evil, and I understand the university's reasoning for doing it: to protect itself from corporate fuckheads. (Not all people in corporations are fuckheads, but every area in life has its fuckheads.)