In a transparent bid to blunt rumors that executives are considering selling or shutting down the company with layoffs imminent, Napster has issued a press release stating in part:
LOS ANGELES, Jan. 18 — Napster, the biggest brand in digital music, announced today that the number of premium paid subscribers enjoying its award-winning digital music subscription service has this week surpassed 500,000. In addition, there are over 50,000 college students subscribing to the service through Napster’s leading university program. The company also announced that over the last year its subscriber base has grown by over 100%.
“Doubling our subscribers over the last twelve months demonstrates the mass market potential of our music subscription model and the powerful appeal of Napster to music fans who want it all,” said Chris Gorog, chairman and CEO of Napster. “With a track record of robust growth, exciting new development in the pipeline and over $100 million on our balance sheet, we are extremely excited about the future of Napster.”
The company will provide additional details on its operations and performance during its third quarter earnings call, scheduled for February 8th, 2006.
Full press release here.
That, folks, is sad. “Sad” as in “weak,” not as the opposite of glad; we’ll shed no tears over Napster’s demise. Gorog must be tired, if he’s “extremely excited” about Napster’s future dirt nap (Dirt Napster?). Let’s play a fun game called Finish This Sentence: “Who knew there could be half a million __________ ?”
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Related articles: Report: Napster executives do the math, consider selling or shutting down, layoffs imminent – January 16, 2006
Napster CEO Gorog: Apple iPod is a ‘villain’ – December 12, 2005
More blood on Apple iPod’s Click Wheel: Thomson gives up on MP3 player, CE markets – December 12, 2005
More blood on Apple iPod’s Click Wheel: BenQ withdraws from MP3 player markets – November 28, 2005
More blood on Apple iPod’s Click Wheel: Olympus halts production of portable digital music players – November 09, 2005
Do the math: Napster posts $13.6 million second-quarter loss – November 02, 2005
More blood on Apple iPod’s Click Wheel: Rio is dead – August 26, 2005
Napster President: Apple CEO Steve Jobs has ‘tricked people into buying a hardware trap’ – August 22, 2005
Apple’s roadkill whine in unison: ‘incompatibility is slowing growth of digital music’ – August 12, 2005
Napster: the only thing missing is the sock puppet – August 04, 2005
Napster, other Windows Media-based music services ‘chasing a niche opportunity’ – June 29, 2005
SmartMoney: Napster is a snooze, gushing money and renting music is un-American anyway – July 06, 2005
Napster To Go Soon? Reports $24.3 million net loss on $17.4 million net revenue – May 11, 2005
Napster is a joke – April 05, 2005
Napster CEO Gorog: Steve Jobs ‘must be pretty frightened’ of Napster To Go – March 14, 2005
Apple’s iPod has blood on its Click Wheel: Virgin Electronics is dead – March 08, 2005
Napster’s math does not add up – February 28, 2005
Users thwart Napster To Go’s copy protection; do the music labels realize the piracy potential? – February 15, 2005
Napster CEO Gorog: ‘it’s stupid to buy an iPod’ – 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
The de facto standard for legal digital online music files: Apple’s protected MPEG-4 Audio (.m4p) – December 15, 2004
Napster CEO: ‘it would be great’ if Apple iPod supported WMA – March 09, 2004
Napster CEO: Apple iTunes, iPod ‘consumer-unfriendly experiences’ – March 09, 2004
Napster 2.0 posts US$15 million relaunch loss – February 08, 2004
They can spin it any way they like, the balance sheet don’t lie. They’re bleeding money like a stuck pig.
Who knew there could be half a million retards blowing $14.95 a month on crap?
Let’s see how much people love Napster and subscriptions in general once they fold up and all the accounts disappear.
Balance sheet translation:
Assets = Liabilities + Owners’ Equity
Therefore: Napster may have $100MM on their balance sheet, but if you were able to look closer in the numbers, how much is actual asset with real market value and how much is self generated, self inflated goodwill attached to the Napster name. Also, look at their debt/asset ratio, their debt coverage ratio, and their short term assets
If you don’t have enough cash to run a business, you will end up in the chop shop in no time at all!
Their “subscription model” is awesome. The more customers you have the bigger your loses. They just don’t teach that kind of out of the box thinking in business school. Just think, the more suckers, oooops I mean subscribers, they get the faster they’ll burn through the last of their 100 million.
I know! I know! I know the answer. It is idiot. I am I correct.
There’s a song I remember hearing back in the ’70’s (yes, I am that old) that reminds me of this guy. It was “White Punks On Dope.”
I’m sorry, but I had to say it.
The fact is, there is an apparent demand for subscription services. Just because Apple doesn’t offer one, that doesn’t mean it doesn’t exist.
Case in point, everyone here always talked about how there was obviously no demand for an FM radio option in an MP3 player. The only evidence to suggest this was that the iPod was selling just fine without one – pretty sketchy evidence. But alas, Apple did indeed come out with an option that satisfies the demand that many Apple fanatics refused to see.
Likewise, some people do actually want a subscription service. Just because it doesn’t appeal to you does not mean mean that there isn’t a use or demand for it.
Oh and additionally, no one that actually has a subscription service is actually losing anything if the subscription ends. Keep in mind what the subscription is actually paying for and you’ll understand, though I doubt many of you will.
“Who knew there could be half a million __________ ?”
suckers
While I’m sure Apple downplays the profitability of downloads, there wouldn’t be much to be made as an also-ran store not subsidized by iPod profits.
I hope they go out of business soon. It annoys me no end that my employers (Penn State) give these jerks loads of money each year in some pretend attempt to stop people downloading MP3s.
Unfortunately every single Penn State Student (or at least close to it, you’d certainly think so walking around campus) has an iPod, making Napster useless for them.
to realist:
Yes, a small and growing demand for subscriptions exist. Right now it does not appear to be sufficient in size to generate a profit. I’m not being critical of Napster for trying the subscription route simply because Apple doesn’t offer it. I’m critical of Napster because of the a-hole Gorog that keeps spouting off his mouth.
I actually don’t want Napster to close. I think Apple needs to have some “viable” alternatives in the marketplace to keep people from getting upset at their monopoly on the digital music business.
The people that subscribe will lose something if Napster closes. They’ve made an investment to date in this model under the assumption they can fill up their Dull DJ or Creative thing with music. Some may have bought those devices based on this model. They also likely have time involved in selecting and downloading music as well as organizing playlists and such. If Napster does indeed fold it won’t be just an “oh well” thing to them.
As far as the FM radio bit is concerned the argument was not that we all were discounting an interest in an FM tuner but that adding bells and whistles to a crappy MP3 player won’t allow it to compete with the iPod. The other point was that we liked the simplicity of the iPod and I personally wasn’t willing to accept a larger device to accommodate such a feature. I think it we go back through the records many here suggested FM as an accessory, not a built-in feature. Apple has done the right thing.
Pog,
Let me get this straight. You want a company to go out of business just because some Penn State employee made a bad decision? Shouldn’t your frustration be directed toward the actual source?
Macromancer
good call,
wait until that hits the news headlines.
500,000 people lose music rights after napster files chapter 11. After spending $179.40 for a one year subsciption, Jill lost all of the rights to play the 2,000 songs on her creative “ipod” wanna be.
take your sony bean and plant it in the backyard and grow an Ipod.
realist: You have a good point of course. However, to answer that, plenty of frustration has been vented at Penn State and its made no difference. Only Napster going out of business will change the business agreement now.
I agree with your point, its Penn State’s fault they got into this ridiculous situation.
That said, I just don’t like Napster, or any other “rent your music” services. I’d be very happy if that business model turned out to be untenable.
There may be value/interest in a subscription model, however it’s of no use if the company offering it can’t stay afloat with it, if the service provided with it is rubbish, if connecting hardware to the software is hard etc.
Apple’s solution may not be 100% ideal to each and every person but it does what it does and it does it simply and well. If and when digital downloads become the norm in conjunction with physical sales then chances are that iTunes will expand and grow to accomodate other sales methods, but for the time being it is doing everything right.
Napster may have a valid product idea but the execution is poor and that is why they’re failing.
iSteve,
The Dell DJ and Creative whatever you call it will still work whether Napster is in business or not. There has been and will be other subscription services that will no doubt work with those devices. So the only thing lost will be the time spent in selecting and downloading music, but even that is trivial because that’s probably done more often anyway because of the music availability that a subscription service offers.
.
.
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Actually, if we were to go through the records here, we would in fact see a lot of posts saying how stupid FM is and how useless it is. I don’t think size was much of an issue since the amount of size it would have added is trivial. Simplicity also isn’t an issue, as evidenced by the fact that the iPod does in fact sport a radio interface that works just fine. It really isn’t a problem to have it as a built in feature that the use can use or ignore, much like photos, videos, games, address book, contacts, and other features that are found in the iPod that are not necessarily being used.
realist: First off, I’m not convinced there is much of a demand for subscription-based music services. 500,000 is a big number, but given the size of the market, it’s not as impressive as it sounds. Not bad, mind you, but nothing to get too excited about.
Secondly, what’s important to Apple is not whether there is a <b>demand</b> for subscription music, but whether Apple can make a <b>profit</b> by offering it. If Napster’s losses are any indication, the answer is no.
Apple makes smart, timely moves. They don’t just jump at every gust of wind. They determined they couldn’t build FM functionality into the iPod without making it chunkier and ruining part of its appeal. MP3 players with FM were not selling, so why bother adding FM to the iPod? By offering FM functionality in a remote, however, they target just that minority that actually care, while maintaining the iPod’s slim form factor that helped it become so popular.
I have no doubt that Apple will introduce a subscription version of iTunes the instant they feel they can make money off it.
Pog: “That said, I just don’t like Napster, or any other “rent your music” services. I’d be very happy if that business model turned out to be untenable.”
That attitude concerns me. Shouldn’t your happiness be based on what you personally do, not on what some company does that doesn’t affect your life? If you don’t like it, don’t use it. Simple as that.
realist: If you’re going to claim that adding an FM receiver to the inside of an iPod wouldn’t make it significantly larger, I think you need to back that up. My understanding is that every FM-capable player is significantly thicker and heavier than its iPod counterpart.
realist: If “music rental” becomes popular, then somewhere down the line Music will become “rental only” and we’ve lost yet another of our fair use rights. Personally I like to own my music, and would like to continue this. Failure of companies like Napster will hopefully mean that I will continue to be able to buy music that I own, and not have to pay a monthly fee to listen to.
Folks, you are such Apple apologists.
The demands for a subscription model DO EXIST, and they are gaining steam in the marketplace. The subscription model makes SENSE: I subscribe to DirecTV, NetFlix, yoga classes, the gym, my cable modem, bottled water delivery, and a whole bunch of other monthly services… why not subscribe to music?
Hell, I would like a subscription model myself, after spending $300 on iTunes downloads last year… for music that I RARELY listen to anymore!! I would LOVE to pay $10 per month to have unlimited access to ANY music out there that I want.
Just because Apple doesn’t offer it doesn’t mean that Apple is right. In fact, Apple’s arrogance almost ensures that they are 100% completely WRONG in this scenario.
Subscription services is where the future is at. And then all of you idiots will be changing your tune once Apple starts offering it.
Renting Music- sucks.
But now that there are new DVD formats on the horizon, I’m not willing to upgrade my current DVD collection.
So I think I’ll be renting my movies hence forth.
S
“Secondly, what’s important to Apple is not whether there is a demand for subscription music, but whether Apple can make a profit by offering it.
Hmmm, kinda like the profit margin on iTunes songs and videos.
“They determined they couldn’t build FM functionality into the iPod without making it chunkier and ruining part of its appeal.“
Unless you work at Apple, I’ll just going to assume that you really don’t know if that statement is true.
“but given the size of the market, it’s not as impressive as it sounds. Not bad, mind you, but nothing to get too excited about”
Hmmm, that’s what all the Apple apologists were saying about video playback in the iPod, that is, until Apple bundled video playback into the iPod.
Pog: “If “music rental” becomes popular, then somewhere down the line Music will become “rental only“
Well, that’s possible, but unlikely.
LordRobin,
Notice that the iPod remote is not much bigger than the old remote even though it now has a larger interface and FM radio.