Comments on: Napster For Sale - But This is not a Healthy Company

By: Napster Buys AOL Music: What’s Next?

Napster Buys AOL Music: What’s Next? — Tue, 20 May 2008 09:49:14 +0000

[...] were losing $10 million in cash per fiscal quarter, and had $100 million in the bank. I called them unhealthy. Since that time, they’ve reported another fiscal quarter. They had stellar subscription [...]

By: Wardle Berotte

Wardle Berotte — Sat, 17 Feb 2007 17:19:38 +0000

I really need free music less than 500k

By: VisualBlog - das VisualOrgasm-Weblog » Yahoo! hat ne Milliarde übrig

VisualBlog - das VisualOrgasm-Weblog » Yahoo! hat ne Milliarde übrig — Fri, 22 Sep 2006 09:38:08 +0000

[...] Nachtrag: Auch Napster sucht nen Käufer… Tags:Web 2.0 [...]

By: Techcrunch » Blog Archive » Exclusive - Zookoda Goes Up For Auction

Techcrunch » Blog Archive » Exclusive - Zookoda Goes Up For Auction — Thu, 21 Sep 2006 09:17:03 +0000

[...] While some companies have the ability to hire investment banks to help them sell themselves (see Grouper and Napster for recent examples), eBay is proving to the be liquidity path of last resort for many struggling web startups, or those that simply want to sell out for a few hundred thousand dollars. We’ve tracked at least six “web 2.0″ companies who’ve attempted to sell themselves on eBay over the last year, and four of the six have been put up for sale in the last month. As an aside we also noted a Digg user profile that sold on ebay for $822 in July 2006. [...]

By: Rags's Soapbox

Rags's Soapbox — Wed, 20 Sep 2006 04:40:44 +0000

Napster: Going once, going twice……

Napster just announced that it had hired UBS to evaluate strategic alternatives. Usually this means that they want to hire an agent to drum up interest from potential acquirers and create a competitive bidding situation. An agent is usually hired…

By: goeb

goeb — Tue, 19 Sep 2006 23:35:44 +0000

I’ll tell you why they are unhealthy: the 100 mill they have is actually what is left of 180 mill they got as an infusion of investment to help them less than a year ago (I believe tmy timeline is right). The year before that they had burned through much more cash. Less than 5 years ago they were a 2 billion dollar company. Think about that: from 2 bill to a 100 mill in less than 5 years!

If not for the rumor of a buyout (and they have garnered an absurd premium), they would be valued at their cash reserves, a dollar for a dollar. Essentially, the market was pricing their customer base, music contracts, experience, staff, and all assets at ZERO DOLLARS.

More over, they are bleeding subscribers now because of the ad model. Their greatest asset will no longer exist soon. (They had 600,000+ and lost 50,000 in less than a quarter.) Their business is now a schizophrenic mix of SpiralFrog (that most credible investors have ZERO interest in) and the model which has failed for them for almost five years.

By: Techcrunch » Blog Archive » A week in DRM wonderland

Techcrunch » Blog Archive » A week in DRM wonderland — Tue, 19 Sep 2006 22:54:56 +0000

[...] Napster goes up for sale. The poster child of music downloading in the pre-DRM era, Napster, looks like it’s about to be acquired. [...]

By: Trying to Be like Bill Gates » Grange - handicrafts results

Trying to Be like Bill Gates » Grange - handicrafts results — Tue, 19 Sep 2006 17:46:30 +0000

[...] On the other hand Centre Daily - Bill Stringer Popcorn 1. David Coopey 2. Mabel Schillings 3. Martha Deitrich Indian Corn (multi-color) 1. Colleen Rogers 2. Mabel … Jim Gates, Bellefonte; Alan Turner, Rebersburg; and Steve Bennett, Bellefonte “C” Class: Don Snook, State College; Craig … You can also check this out…. microsoft takes partners for communications push (Reuters) Reuters - Microsoft Corp. unveiled plans on Sunday to work with hardware manufacturers to deliver on the company’s ambitions to use its software to simplify how workers communicate with one another.Did you know that Partners means either of two persons dancing together. Okay, okay you may have heard on the news: napster, Still Struggling, Puts Itself Up For Sale Napster’s never been able to regain its cachet in the music-download business after going legit, despite a few different owners, so it’s hardly surprising to see the company essentially put itself up for sale. While the company’s CEO says there’s been a lot of interest in partnerships or joint ventures, Napster’s struggles illustrate the reality of the music download business as one where it’s awfully hard to make money. While Apple’s sold over a billion songs through the market-leading iTunes Music Store, those songs were loss leaders, intended to drive iPod sales and to lock users in to the device. The CEO also says that its new products are getting “traction” — but they don’t look to be helping the company turn a profit, and it said it’s losing paying subscribers as it promotes its free service. There’s nothing here, and nothing in the company’s history, to suggest it can be successful. Perhaps the best thing for the company and its shareholders is to grab whatever cash it can in a buyout, playing off the growing interest in mobile music download services by selling out to a company in the mobile space that can ditch the current Napster offerings and salvage its backend into something useful — with Ericsson, a company already partnered with Napster for mobile music, a prime candidate.Did you know that Sale means the exchange of goods or services for an amount of money or its equivalent; the act of selling. read on to check out what awaits you « Adobe Systems 3Q profit down, tops views (AP) [...]

By: Hexx

Hexx — Tue, 19 Sep 2006 15:44:36 +0000

It’s a shame because it’s my favorite music download service. I have a $10/mo subscription to it and definately am loving it. The problem is I rarely buy tracks online prefering to buy actual CDs. I just use the $10/mo because I don’t have enough cash to buy all the CDs in a month that I would really like to purchase, so it’s a nice suplement.

By: mrsticks1982

mrsticks1982 — Tue, 19 Sep 2006 15:24:07 +0000

What you all hae to keep in mind is that Best Buy cut their ties to Napster recently (not sure when but could have been a few months ago). I was in Best Buy this past weekend and usually use their Napster Kiosk to aide in my CD purchases. However I found out that Best Buy is creating their own in store service where users can mix and burn their own CD’s. Haven’t verified this information but having Napster lose a bigtime contract like that must hurt its chance to hold its footings in a crowded space.

Cheers,
mrsticks1982

By: NAPS Stockholder

NAPS Stockholder — Tue, 19 Sep 2006 15:07:04 +0000

BTW, I _still_ haven’t heard anyone say why its an unhealthy company. Sure, they haven’t become profitable yet, but thats OK since they have the capital for it, and are moving closer to profit every quarter. And sure, they aren’t as “cool” as they used to be, but does that matter to joe-sixpack? (who’s doesn’t read techcrunch.com, but has some vague association of napster=online music). They are going in interesting directions that their competitors either don’t have or aren’t focusing on (free streaming service, ad revenue, overseas markets, etc). I invest based on growth potential, and NAPS has plenty of it.

And keep in mind that the iPod is very popular, but the Itunes Music Store is not successfull at all - the average iPod owner has bought less than 2 albums worth of tracks from it. Yahoo doesn’t break out their music store numbers, but at their prices, they’ve got to have an even higher burn rate than NAPS.

By: NeoTechie

NeoTechie — Tue, 19 Sep 2006 14:57:32 +0000

What are you to do when you become a needle in a haystack?
You sell, take the money, and innovate something new.

By: Brian

Brian — Tue, 19 Sep 2006 14:31:41 +0000

Napster was more coll when it was — more or less — illegal. While the $100m revenue is great, I don’t think the brand will rebound any time in the near future, they really lost their mojo. If I were in management’s shoes, I’d have been looking for a buyer before now. I still think it’s a better opportunity than, say, a social network like Dogster, but it’s an uphill battle to say the least.

By: Colin

Colin — Tue, 19 Sep 2006 14:03:24 +0000

NAPS stockholder - If the business model worked Napster would have made money by now. It seems that someone in Napster management understand this and is trying to save what’s left of your investment.

If your margins are that low and there is a lot of competition (with money I might add “Microsoft, Apple, Yahoo”) then IMHO you don’t have a sound business model.

Take what you can get from a sale.

By: Wayde Christie

Wayde Christie — Tue, 19 Sep 2006 11:13:53 +0000

Maybe Lars from Metallica might be interested.

By: Napster a la venta, ¿realmente alguien lo querría comprar? at Incubaweb

Tue, 19 Sep 2006 10:55:00 +0000

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By: nalts

nalts — Tue, 19 Sep 2006 09:52:42 +0000

So I’m Chad Hurley and I’m reading this. And I haven’t sold YouTube because…

By: LKM

LKM — Tue, 19 Sep 2006 07:53:21 +0000

I’m just glad that Toast isn’t going down with Napster…

By: The Downside » Blog Archive » Top 10 signs that Bubble 2.0 is here

The Downside » Blog Archive » Top 10 signs that Bubble 2.0 is here — Tue, 19 Sep 2006 07:10:06 +0000

[...] Napster still can’t get it together. [...]

By: lemon obrien

lemon obrien — Tue, 19 Sep 2006 06:56:00 +0000

>>no one will make any money until the bands start to sell direct and bypass the greedy “old” labels. “New labels” like Nettwerk get this…

By: mary

mary — Tue, 19 Sep 2006 05:08:30 +0000

Well…hmmm
It’s time that Napster takes a “nap” and never wake up.
It is history, and should put to rest forever.

It has bad branding which its name doesn’t stand for revolution anymore, but disgrace and stagnant.

in 2000: Napster = revolution
current: Naptster = Napkins perhaps (meanings commodities, un-interesting + throwable and irrelevant)

Does worth anything because the spirit is dead, only the name remain.

By: links for 2006-09-19 at [MacStansbury]

links for 2006-09-19 at [MacStansbury] — Tue, 19 Sep 2006 04:47:15 +0000

[...] Napster For Sale - But This is not a Healthy Company In other news, Napster is still in business. Right? Right? Anybody? (tags: napster business) [...]

By: CollegeKid

CollegeKid — Tue, 19 Sep 2006 03:45:19 +0000

Thats unfortunate…Thought you might have made it to everyone’s feedreader.

By: Hip Hop Hooray

Hip Hop Hooray — Tue, 19 Sep 2006 03:30:53 +0000

Apple and Itunes actually appears to be going the other way on a downward spiral. The Ipod was a cool fashion accessory but like all fashion trends it’s slowly losing it’s street cred. Will Apple be so successful once the mobile phone becomes the all-in-one device you use to carry and play your digital content on-the-move? Their continued success is certainly far from guaranteed.

Back to the Napster story. I’ve always liked the Napster subscription model which they pioneered. Unfortunately, with other players like Yahoo! moving into the space, they long ago lost their unique selling point to attract new customers. I’d expect a reasonable churn rate with a product that ultimately requires you to continue leasing the music you’ve downloaded for an unlimited period of time. But I dread to think what the margins are like on the subscription product. Surely around 50-60% is going to the record industry in royalties, then you have to pay for the bandwidth of all those unlimited downloads, customer support (I have seen lots of support issues regarding playback of rented music.. licensing issues) product development and marketing. Tough to turn a profit.

I’m also sure the increased competition will continue hurting Napster’s ability to bring in new customers. Especially when the likes of Yahoo expands into the same foreign markets where Napster operates. I think it’s a good time to sell off the business while the brand name still has some relevance and value in the music business.

By: Michael Arrington

Michael Arrington — Tue, 19 Sep 2006 03:05:15 +0000

collegekid - it was an error that feedburner caught and corrected.