“But that may not be enough to encourage investors focused on the bottom line–which is a nasty one. Last quarter Napster lost $19.9 million–that is,the company lost nearly a dollar for every dollar it took in. Nor is Napster’s loss an aberration: From April 2003 through the end of March 2005, the company lost $97.8 million selling digital music,” Kafka reports. “When does Gorog see Napster making a buck? He won’t say, only to allow that a big goal for the coming year is to ‘increase our path to profitability.'”
Our Take: “Increase our path to bankruptcy” would have been more like it.
Kafka reports, “If this sounds familiar, it’s with good reason: Napster is in the same position of the big-growth, moneylosing net stocks of the last boom. The question is whether Napster will end up as either the digital music era’s Yahoo! or Pets.com.”
Our Take: Napster: the only thing missing is the sock puppet.
Kafka reports, “There is one major difference between Napster and its competitors, but it likely won’t be a real advantage: Napster is the only ‘pure play’ digital music company…. most of Napster’s other rivals–or potential rivals–are able to eat losses on music offerings in order to sell, say, advertising (Yahoo!) or high-margin electronics (Apple). Napster doesn’t have that luxury. In the end, predicts Stifel, Nicolaus analyst Kit Spring, that handicap will force Napster out of the race. ‘I think Napster can’t surivive on its own,’ he says. ‘It will have to partner with a larger company or more likely just sell.'”
The full article “Napster On The Rocks?” has much more here.
Like we always say, “it’s stupid to buy from Napster.”
Related articles:
SmartMoney: Napster is a snooze, gushing money and renting music is un-American anyway – July 06, 2005
Colleges should not exclude Mac and iPod users with Dell, Napster music hardware, software offering – July 06, 2005
Napster, other Windows Media-based music services ‘chasing a niche opportunity’ – June 29, 2005
Napster To Go Soon? Reports $24.3 million net loss on $17.4 million net revenue – May 12, 2005
Study shows Apple iTunes Music Store pay-per-download model preferred over subscription service – April 11, 2005
Napster users admit sharing passwords to save on subscription costs – April 08, 2005
Napster is a joke – April 05, 2005
Napster raises fourth-quarter revenue forecast from $16.5 to $17.5 million – April 05, 2005
Colleges offering students music services that aren’t cross-platform, don’t work with iPod – March 22, 2005
Mossberg: Apple’s iTunes Music Store vs. Napster To Go – March 18, 2005
Napster CEO Gorog: Steve Jobs ‘must be pretty frightened’ of Napster To Go – March 14, 2005
Apple’s iTunes Music Store downloads pass 300 million songs milestone (with chart) – March 02, 2005
Napster’s math does not add up – February 28, 2005
Napster’s dirty little secret: changing subscription services into downloads is easy – February 18, 2005
Napster feels the heat over flawed copy-protection scheme – February 17, 2005
Apple CEO Steve Jobs warns record industry of Napster To Go’s security gap – February 16, 2005
Users thwart Napster To Go’s copy protection; do the music labels realize the piracy potential? – February 15, 2005
Napster-To-Go’s ‘rental music’ DRM circumvented – February 14, 2005
Napster CEO Gorog: ‘it’s stupid to buy an iPod’ – February 10, 2005
Report: Napster faces uphill fight to gain share, Apple prepared to run iTunes at a loss – February 10, 2005
Napster’s ‘iPodlessness’ doesn’t bode well for its future – February 10, 2005
$10,000 to fill an iPod? Napster’s going to end up with egg on their face – February 04, 2005
Why ‘Napster To Go’ will flop – February 03, 2005
Napster CEO: We’re ‘the biggest brand in digital music, much more exciting than Apple’s iTunes’ – February 03, 2005
Cornell University’s Mac users ‘uniformly unhappy’ with Napster – January 19, 2005
Cornell University wrestles with Napster’s exclusion of Mac and iPod-using students – September 08, 2004
Why are Cornell’s Mac students being forced to pay for useless Napster? – September 07, 2004
Napster schools to Mac-using students: bend over and take it – September 04, 2004
Apple launches ‘iTunes on Campus’ institutional site license program – April 28, 2004