“Napster urged TV viewers to ‘Do the math!’ in a poorly-received Superbowl commercial on Sunday. But when we do the maths on Napster’s business, we discover the company lost $1.36 on every $1 it earned in the last three months. Excluding income from Roxio, which Napster now classifies as ‘discontinued operations,’ Napster had revenues of $12.1m in its Q3 2005 period, posting a loss of $16.4m,” Andrew Orlowski reports for The Register.
“The good news is that the gap is narrowing, and the company has cash and short-term investments worth $45m – enough to see the year out at the current burn rate. The bad news is that its new services require heavy promotion: the company will spend $30m alone on promoting its ‘Napster To Go’ rental service. At 20 per cent, Napster’s gross margins are healthier than Apple’s, but the Cupertino giant said it’s prepared to run its iTunes rival at break-even or at a loss. And it can afford to, given its booming iPod business,” Orlowski reports.
Full article here.
Yeah morons. The money is in selling the hardware. Any bets when Napster folds? I give them a year…..
According to the Register, Napster lost $44m in the last nine months, and they have $45m in the bank. Do the math!
A year with those crappy Napster commercials seems like a long time to me.
Magic word: Lost, as in the battle is lost for Napster, they just have a couple of million bucks to burn along the road.
We don’t need no water let that little Napster Burn. Burn little Napster, Burn.
“The Roof” Parody
-Bloodhound Gang
they won’t go away with microsoft behind them, microsoft has a “smidgeon” of cash in reserve
parodies cease to be humorous when you have to explain them.
Loss or no loss, I still won’t rent music. iTunes is the only place I shop.
Napster needs to exist to keep the playing field stable. I won’t use them, but hope they survive with a small market share. I understand that Apple at any time can, with a simple firmware update, make the iPod accept any other alternative music, if, it became necessary to do so.
This, combined with the fact that they can (like Micro$in does in other scenarios) lose money on songs and make up for it with hardware sales of the iPod, gives them long term sustanance and easily puts to rest the stupid statement from Dell that the iPod is a fad.
I severely doubt that Microsoft will keep Napster propped up at all. There are plenty of other WMA online music stores out there. If Napster disappeared it wouldn’t even be a blip on Microsoft’s radar. They’ve got much bigger fish to fry…
One other point is that if Apple ever senses that the iPod/iTMS is slipping in market share even in the slightest, they can roll out their own iTMS subscription model to crush Napster and the others.
They just haven’t done so yet because it isn’t necessary and it likely won’t ever be. They are assuming that the renting/subscription model won’t ever be as popular as owning your own music(and I agree with them). However if the market ever did change, they’d be right there to start up their own.
M1KeR0$oFt doesn’t give a shit about Napster. It’s just another WMA service to them – like Hell-Mart and the rest. None are worth shit and M$ has no skin in the game with them except that they help propogate the M$ DRM.
Wonder if any of Napsters investments include AAPL shares?
Bye bye Napster – it was short and sweet.
doing business at a loss is unhealthy, even if you can afford to do it.
here’s hoping that napster dies a quick death again…
baawhahahhahhahahhaah
What ever happened to MS’s music store? Is it still there?
I was reading the thread on Sirius’ overtures to Apple, and I said in a post that satellite radio is still in its infancy but has vast potential as a delivery medium and I referred to it as “the future of radio”. I compared it to cable television in its ability to deliver specialized programming, as neither has to compete for a slice of the broadcast spectrum.
Which got me thinking…
If, as I believe, that satellite radio is in its infancy, and that as more providers enter the fray, as they will, then not only will the services improve, but the cost of a subscription will also fall. So, if satellite radio becomes able to provide more user-configurable services, in music and talk, where does that leave Napster’s subscription model? Basically, Napster’s competitors will not be pay-and-own download services like iTMS, but every company that has access to a satellite. Correct me if I’m wrong, but aren’t Napster’s subscription customers paying for what is in effect personalized radio? Stop paying the bill and the music stops. Why wouldn’t they just jump ship to Sirius or XM or whichever service offers a lower subscription cost?
viridian,
I think the only difference would be that you could select specifically which songs you want to hear instead of just random songs grouped by genre. But with all the work involved in searching for, selecting, and downloading your preferred songs, it probably would be just a lot easier going with the satellite radio like you mention.
I think Apple should make a special edition iPod that can play satellite radio. That way people that want it can pay for it, those that don’t can just buy a regular iPod. An attachment might make it more configurable for different regions/countries, but an integrated system could be done easier without sacrificing the simplicity and ease of use that the iPod is known for.
Napster will be taking a dirt nap soon!!!!
“I think Apple should make a special edition iPod that can play satellite radio. That way people that want it can pay for it, those that don’t can just buy a regular iPod. An attachment might make it more configurable for different regions/countries, but an integrated system could be done easier without sacrificing the simplicity and ease of use that the iPod is known for.”
king_alvarez,
I made the case for region-specific add-on modules because I think it would be difficult if not impossible to get manufacturers to sign on to a common format. Region-specific DVD players don’t cause as much problems because people don’t typically take them along when they travel. Travelling with it is the iPod’s raison d’etre, so until Apple can come up with a solution that would enable a single iPod to “roam”, so to speak, they’ll have to sell region-specific “iPod satellites”, which to them is not an “elegant” solution. An iPod satellite would actually not be a bad idea, because as I said, the interface is made in heaven for satellite radio.
Hmmm….
I just had a startling thought. What’s to stop Apple themselves from starting iTunes Radio, delivered by Internet to Macs, or via satellite to iPods? Were they cool to Sirius’ overtures because they are studying the possibilities themselves? Imagine if they introduce iPod satellite and it’s as big a hit as the iPod has been, mainly because they also have a streaming service that’s a part of iTunes, like the Internet stations already there. What would be nice is if they could tie it into the iTMS so you hear a song on Apple Radio and just click the “Buy Current Track” button to order it from iTMS. I want royalties for this idea.
Viridian,
well…the special edition would work well here in the U.S.
interesting idea regarding their own iTunes radio… the fact that they are working with Motorola and cell phones, anything could be possible.
It’s just a matter of time, Crapster2 has been all about hype. Not sound buisness figures.
They, like so many “bargin” PC companies before them, get into a cycle of lower and lower prices to increase market share, only to crap out in the end.
When your selling subscriptions, your losing money from music sales.