“Technical glitches by Microsoft and the digital music device makers have hampered Napster Inc.’s ability to close the gap with Apple’s iTunes, the dominant online music service, Napster’s chief executive said on Tuesday,” Adam Pasick reports for Reuters. “‘There is no question that their execution has been less than brilliant over the last 12 months,’ Napster Chairman and Chief Executive Chris Gorog said at the Reuters Global Technology, Media and Telecoms Summit in New York. ‘Our business does rely on Microsoft’s digital rights management software and our business model also relies on Microsoft’s ecosystem of device manufacturers,’ he added.
“‘It’s a lot more complex to get organized properly than it is to build one device and one service as Apple has done,’ Gorog said. ‘It’s always been painful at the introduction of new technologies. But it always takes shape like it’s done in the past.’ Gorog, whose company has one of the best known names in the business but has failed to put a dent in Apple Computer Inc.’s 80 percent market share, argued that eventually the ‘Microsoft ecosystem’ and its Windows Media format will prevail, with new devices on the way from firms like Samsung and Sony. ‘Ultimately, the consumer electronics giants … are all going to come to this Windows Media party,’ he said. ‘This is really going to be the ubiquitous format,'” Pasick reports.
“Napster, which shares a brand but little else with the free service that originally shook up the music industry in the late 1990s, has struggled to make its case with investors and consumers, Gorog acknowledged,” Pasick reports. “‘We have not been as successful as we might in articulating the real value of this business,’ he said. Napster’s market capitalization is about $160 million, but it has cash assets of about $112 million, leaving it with a relatively small enterprise value. The company’s third-quarter net loss widened to $17 million for the three months to December 31, from a loss of $12.8 million a year earlier… Gorog insisted that despite Apple’s dominance, the competitive landscape would be far different ‘in the next 12 to 24 months.'”
Full article here.
MacDailyNews Take: Microsoft as the source of “technical glitches and less than brilliant execution” shouldn’t surprise anyone. That’s like saying Häagen-Dazs will produce ice cream. Some things in this world are utterly self-evident and totally predictable. And hasn’t Microsoft been throwing a “Windows Media party” for years now? The problem for Napster and many others is that nobody came. That so-called party was over before it began. As usual, success is always “12 to 24 months away,” with “with new devices on the way.” Nice moving targets and pie-in-the-sky dreams. Napster shareholders must be proud as they plummet toward the pavement. Gorog is correct about one thing: in 12 to 24 months the competitive landscape will be far different for his company — it’ll be buried six feet below it, DirtNapster™ style.
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