Thurrott on Apple fanatics, Roxio and Napster

“Napster owner Roxio this week sold virtually its entire consumer software division to Sonic for $80 million so it can change its name to Napster and focus solely on getting the music service off the ground. And contrary to charges by Apple fanatics, Napster was already making money and is now poised to make even more: The Napster division was previously earning $7 million to $8 million a quarter and will likely make about $40 million in its first year, according to the company. “With the news today, we are on a path to become a very well-funded pure play in one of the hottest sectors in the consumer technology market,” Napster CEO Chris Gorog said. Indeed, the new Napster has about $130 million in cash, all of which will now go to promoting its music service,” Paul Thurrott writes for WinInfo in his weekly “Short Takes” column.

Full article here.

MacDailyNews Take: $7 to $8 million a quarter, huh? As of June 26, 2004, Apple had $4,966,000,000

33 Comments

  1. “I’d love to meet him, cause 5 minutes afterwards he’d have 2 black eyes, a broken nose and no teeth.”

    Love your passion but hey buddy you need anger management!

  2. Thurrott, that’s 7.9 million in total revenue….NOT profit you twit.

    Napster is most likely loosing money at this point and that’s why it is selling it’s software division (Roxio ie: Toast/Jam). It needs to raise cash to battle Apple and the iPod.

  3. mac_user:
    if you are sick of reading about Thurrott’s news, then don’t read the articles. MDN is not forcing you to read everything it posts about Thurrott. They are just giving you a choice. Appreciate the fact that you have a choice and use that ability accordingly. You are not the only reader here, so please acknowledge the fact that different people may be interested in reading about different things. MDN does not cater to only your interests.

  4. What is Gorog Smoking? Selling off the cd burning software is the most idiotic thing. As a Mac head I can do little but laud the removal of another pathetic rival to the almighty iTMS.

  5. Valis writes “Last time I checked, I don’t remember Apple making almost 5 billion dollars on just the iPod and iTunes. This is an unfair comparison.”

    The comparison is between Roxio/Napster’s $130M in cash and Apple’s $4,966M in cash. Roxio/Napster sold Toast to add to its cash reserves. So selling off its most valuable asset still leaves Roxio/Napster considerably behind Apple in cash on hand.

    MDN is making a point about this because Thurott is making a point about the $140M, and how this just might spell doom for Apple.

    You’re correct in that MDN wrote about the $40M Roxio/Naptser is earning each year on the music service. That figure needs to be compared to the $1,000M or more Apple makes on the iPod and iTunes Music Store.

    Either comparison (cash on hand or annual revenue) puts Roxio/Napster at a serious competitive disadvantage, and so Thurott really doesn’t have cause for optimism on THAT account.

  6. Sure, Roxio/Napster might “make” $40 million this year, but is that “profit” or “sales”? More likely, it’s “sales.” If they expect to realize $40 million in profit, that might be saying something, but that means they’d have to sell a hellulva lot more than just $40 mil. And there’s no way that can happen, since they’re doing $7-8 million in sales per quarter. They’ll probably burn through that $130 mil in a coupla years and be done. The only question is, will they go out with a bang? Or a whimper?

  7. Posts from “twelveightyone” – (missing an ‘e’ aren’t we?) – just serve to illustrate my opinions on the Mac-zealot.

    I thank MacDailyNews for linking to my site and providing me with a steady stream of abuse from Mac Fanatics to prove my point far more eloquently than my words ever could.

  8. I think the point of the Napster issue was to show that the other stores are not floundering about waiting to die. Other online music stores are turning a profit too. While I don’t think this immediately spells doom for Apple, it certainly shows that not everyone is flocking to iTunes for music. Nobody stays on top forever.

  9. You can’t compare Roxio to Apple. Roxio does Napster, and nothing else. Most of Apple’s money comes from Macs. Virtually ALL of Apple’s banked cash came from Mac sales.

  10. Any previous posts made here attributed to me were not made by me, BTW. I couldn’t care less if MacDailyNews readers visit my site or not. Unless of course you’re interested in Windows news for some reason.

    However. “twelveightyone”: Drop me a note, tough guy. I’d love to me you as well.

    G5Man: It’s true that I was one of the first cable modem customers in the US (not DSL). That’s not a matter of pride, it’s just a coincidence of location.

    –Paul

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