“Napster Inc., the online-music pioneer that remade itself as a retailer after bankruptcy, said it hired UBS Investment Bank to assist in the possible sale of the company,” Michael White reports for Bloomberg. “UBS was hired to evaluate strategic alternatives including a sale or an alliance after possible suitors expressed interest, Los Angeles-based Napster said today in a statement. No timetable has been set for a decision.”
White reports, “Napster, originally a free file-sharing service, sought bankruptcy protection in 2002 after being sued by record labels. Roxio Inc. purchased Napster that year and used the name to start a paid music-download service. The market is now dominated by Apple Computer Inc.’s iTunes, and Microsoft Corp. this year plans to start a new service for its Zune player. ‘The competitive environment continues to heat up,’ said P.J. McNealy, an analyst with American Technology Research in San Francisco, said in an interview. ‘The days of being a stand alone digital-music service may be numbered.'”
“Napster’s paid subscribers fell 7 percent in the three months ended June 30 to 508,000. The company lost $9.8 million or 23 cents a share in the period. Napster, which in 2004 had an 11 percent share according to NPD data, now comes in at about 4 percent,” White reports.
“Napster had counted Microsoft Corp. as one of its key allies after Microsoft in 2003 highlighted the Napster service on the Windows Media Player. The following year, Microsoft made Napster the marquee partner for a new technology in Windows Media that would let customers get hundreds of thousands of songs on portable devices for a monthly subscription fee,” White reports. “Earlier this year, Microsoft shifted its focus to a music- service partnership with Viacom Inc.’s MTV cable-television music channel. Then, in July, the software maker said it will compete with Napster directly, selling its own music service for a device called Zune that will take on Apple’s iPod this Christmas.”
Full article here.
It looks like Napster finally did the math.
Related articles:
Beleaguered Napster circles bowl, subscribers drop 7 percent, Gorog won’t rule out sale of company – August 03, 2006
Free, legal and ignored: Mac- and iPod-incompatible beleaguered Napster dying at colleges – July 06, 2006Napster CEO Gorog blames Microsoft for failure to compete with Apple’s iTunes Music Store – March 01, 2006
Napster CEO Chris Gorog has ‘secret plan’ to help beleaguered company become profitable – February 09, 2006
Google: no interest in Napster, no plans to develop music store at this time – January 31, 2006
Napster does the math: layoffs commence with 10-percent of workforce lopped off – January 25, 2006
EMI Music Chairman: Music subscription services like Napster and Rhapsody haven’t beeen huge – January 23, 2006
Napster CEO Gorog: ‘we are extremely excited about the future’ – January 18, 2006
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
Do the math: Napster posts $13.6 million second-quarter loss – November 02, 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
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
“Napster” once stood for free media. With all these TV and music distributors wanting Ad supported content given away, it is a much better Karma match for Napster to be sold to YouTube or something and once again reclaim its roots.
I, along with many people, loved Napster back in the day. I don’t intend to ever go back to it, but it would be nice to see it reclaim it’s history and live on in that niche space.
One thing is for certain, it will NOT live on in its current space for much longer.
“MacDailyNews Take: It looks like Napster finally did the math.”
BWAAA-HAHAHAHAHAHAHAHA!!
…and first to boot!
…hokay… NOT first.
gonna go have a slice of humble pie now.
Renting music online doesn’t work and Napster has proven it by its failed attempt. Real, Rhapsody will follow this ill fated path. Renting music is inconvenient, more expensive, and a big hassle to keep up your subscription and if you don’t, you lose it all. Also you can’t burn a CD or move it to your favorite music player like an iPod. So this news is no surprise to me.
this news makes reading an article like the one here all the sweeter… and funnier. seems Chris Gorog would have done better had he kept Roxio… at least he would have had a backup plan.
was it curiosity that killed the cat? no, it was iPod+iTunes.
Me Gorog. Secret Plan no work. Me sell company.
My question is,: what’s to sell? All other WMP based download services are in the same boat as Napster. Why would anyone purchase a failed business model?
I just hope Toast survives!!
Me Gorog. Me Screwed.
So long kittie!
The only reason I’d see someone buying Napster would be to promote something else via the website. Don’t know what that would be.
The on-line music segment is now overcrowded. Maybe someone who doesn’t have a music biz like say Netflix could snapt these guys. Assuming that they may want to get into that biz which is a guess on my part.
Fatal phrase of the day:
“Napster had counted Microsoft Corp. as one of its key allies…”
Thanks for the link — wow, how off was he…? In this interview that was on Sept 01, 2004, he expects Apple’s market share to be less than 10 percent within 24 months…
Well, it’s Sept 18, 2006, and Apple’s market share has gone UP, depending on what and where you’re measuring from 70% up to 88% (legal downloads in the U.S.)…
The other side of the coin is, let’s say I have a Napster account for 3 months or so, and Napster goes belly-up… I’ve spent ~$30-$45 and what will I have to show for it…?
If I wanted unlimited music, that’s what Internet radio is for… If I hear a song I like, I go to P2P and or the iTunes Store… $30/$45 w/ Appe is a much better investment than w/ Napster…
ds. =)
Los Angeles, CA
“Ten years from now we are… one of the biggest names in digital music, if not the biggest. We are ubiquitous, and we are cross-platform. We are everywhere you want to listen to music — in your PC, in your living room, in your car.” — Napster CEO Chris Gorog • March 2005
A little over a year ago that statement came out of Gorog’s face and now he’s looking for a soft place to land.
And the band played on…
MacDailyNews Take: It looks like Napster finally did the math.
Uh, no. That’s why they called in UBS.
Buuwhahahahaha
What happenes to all yer subscription music when Napster takes a dirt nap?
Your player calls in, gets no answer, and empties itself. Yikes.
With an ally like microsoft, who needs an enemy?
Life’s but a walking shadow; a poor player,
That struts and frets his hour upon the stage,
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.
hagar57
That is a very very good question. Microsoft is amazing partner. All what they do is wait to screw you up.
MDN magic word: love
What suitor expressed an interest? Only one possibility to my mind, Creative.
Amazing how reality can F*%k up some really good bravado!
MW: Race.
As in: Just dropped out.
SAnDisc will buy them and create their own closed system like Apple and Zune drm
“SAnDisc will buy them and create their own closed system like Apple and Zune drm”
– Nope, SanDisc is teamig up with REAL !! Is trusting Rob “Doughnut” Glaser any smarter than trusting MS ??
At least Beleaguered is now in the right place.
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If I had been a shareholder in Roxio, I would be suing Gorog & the board of the then Roxio (now Napster). They threw away a profitable business with plenty of growth potential and threw away tons of money chasing a business on a questionable model in a market they were ill-prepared and underfunded to compete in. That’s not a bold or gutsy move– that’s playing with other people’s money.
I find it amazing Microsoft can find anyone to trust them. Microsoft is a sociopath when it comes to partnerships. They’re your best buddy until they find a bigger, better deal — then they dump you and do everything they can to bury you.