“It was a breakthrough deal that would have put the Napster kitty on millions of Hewlett-Packard computers. But in the days leading up to Napster’s re-launch in late October, HP suddenly — and without explanation — returned Napster’s $250,000 check and canceled the agreement to install a link to Napster’s online music service on its computers. Worse, in January HP announced a surprise partnership with Napster rival Apple Computer to feature the iTunes Music store on HP computers and sell Hewlett-Packard branded iPod music players,” Dawn C. Chmielewski reports for The Mercury News.
“Neither HP nor Napster’s parent company, Roxio, would comment on the soured deal, whose details were confirmed by sources familiar with the agreement. But its collapse was one of several setbacks since the reintroduction of Napster, the pioneering song-swapping renegade, as a paid music service,” Chmielewski reports.
“Napster is losing money, and top executives have left the company, including its president, chief financial officer, vice president of programming and head of corporate communications as well a key board member. On Wednesday, Roxio began laying off people at its Napster division. A Roxio spokeswoman said the company was ‘eliminating redundancies in the organization’ but declined to say how many people lost their jobs,” Chmielewski reports. “Alex Luke, the long-time vice president of music programming, who left shortly after the service’s launch to join the rival Apple service.”
“And while Napster can legitimately claim it’s the second most popular online music service, information provided by insiders at two of the major music labels shows it sells only about a quarter the number of downloads from their artists as Apple’s market-leading iTunes store. Napster refused to release download figures… Napster has attracted about 90,000 subscribers in its first two months — ranking it fourth, behind RealNetworks’ Rhapsody service, America Online’s MusicNet and MusicMatch,” Chmielewski reports.
Full article here.