Comments on: Napster Buys AOL Music: What’s Next?

By: Best Buy and Napster: Dumb 2.0 — mathewingram.com/work

Best Buy and Napster: Dumb 2.0 — mathewingram.com/work — Mon, 15 Sep 2008 15:09:31 +0000

[...] a dismal failure, Virgin Music wouldn’t have shut down, AOL Music wouldn’t have had to be acquired (by who? Oh yes — Napster) and satellite radio companies Sirius and XM likely wouldn’t [...]

By: music » Blog Archive » Napster Buys AOL Music: What Is This Company Doing?

Sun, 24 Aug 2008 00:36:36 +0000

[...] read more | digg story [...]

By: I Am Failing To Get Excited About Napster’s 6 Million Songs

I Am Failing To Get Excited About Napster’s 6 Million Songs — Tue, 20 May 2008 09:49:44 +0000

[...] unprofitable and still makes most of its revenue from all-you-can-eat subscription sales. Both AOL and Yahoo bailed out of this business, since consumers don’t seem to like it and the labels [...]

By: f324880ba22bf153aba9

f324880ba22bf153aba9 — Tue, 08 Jan 2008 08:17:52 +0000

f324880ba22bf153aba9…

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By: Blog Feeds about Music » Archive » Comment on Napster Buys AOL Music: What’s Next? by Randomn3ss …

Tue, 02 Oct 2007 16:06:06 +0000

[...] You can read the rest of this blog post by going to the original source, here [...]

By: Randomn3ss » Napster buys AOL Music - who really cares?

Randomn3ss » Napster buys AOL Music - who really cares? — Tue, 02 Oct 2007 15:39:58 +0000

[...] week Napster announced they were buying AOL Music, which they are getting for a fair price, they will get exposure on the AOL website and gain [...]

By: Napster: The Business and the Stock : A Beautiful Trade

Napster: The Business and the Stock : A Beautiful Trade — Sun, 11 Feb 2007 17:23:50 +0000

[...] the webBarron’s Tech Trader Daily has more information on the Levinsohn addition.Techcrunch: Napster Buys AOL Music: What’s Next?Motley Fool: Napster Ups Its Tune: Fool by [...]

By: Blog Ryan » Ryan’s Radar Jan 15 ‘07

Blog Ryan » Ryan’s Radar Jan 15 ‘07 — Thu, 01 Feb 2007 06:35:18 +0000

[...] Napster Buys AOL Music [Tech Crunch]: Well, looks like Napster figures if they lose money faster they might be able to find someone to buy them out. Already losing more than $10 million a quarter, Napster lays our $15 million for AOL music. If you can’t make money, make it up on volume? I thought we proved this wrong when the first internet bubble burst. [...]

By: Joe D’Ambrose - Blog about life, college, and business » Blog Archiv » You should be using Pandora

Sat, 20 Jan 2007 08:25:32 +0000

[...] to illegally download music. Now 350,000 AOL music listners will become Napster users. RSS Trackback URL 17. January 2007 (01:34) Filed under: Web 2.0,Entertainment [...]

By: Chris Brainard

Chris Brainard — Mon, 15 Jan 2007 20:44:52 +0000

I personally hate Napster and stopped using their service. It was great when it began but they started dropping albums that you could listen to and made it total hell to cancel.

By: WTHarvey

WTHarvey — Mon, 15 Jan 2007 10:53:21 +0000

$90/subscriber? Take the market cap of NAPS the day before the announcement at $165M ($3.68 per share) and subtract the cash (less acquisition cost) and you get $90 million for the value of 566,000 subscribers which works out to $160 per subscriber.

By: Rags's Soapbox

Rags's Soapbox — Mon, 15 Jan 2007 05:58:43 +0000

Napster …

Napster recently purchased AOL Music Now’s subscribers as AOL focuses on a more ad-supported strategy. TechCrunch does some analysis on the financials of the deal and concludes that it’s not a bad deal but that Napster’s war chest just got…

By: Patent-Monkey

Patent-Monkey — Sun, 14 Jan 2007 22:54:19 +0000

Mike – I’m sure one could also imply that the Napster TM has some value bringing the customer value even closer in line. Shows some insight of cost of acquisition in the space too.

From their quarterly filing, they spent $6mm on advertising for the 3rd quarter and burned $7mm in operating cash flow. The result of that advertising spend was a decrease in revenues from last quarter and 2 quarters ago? Concerning to be sure.

On the acquisition, this deal should basically bring almost solely sales and a related 25-30% gross margin to Napster on 350k accounts. Quick math would say that Dave G. is probably right that the incremental P&L probably nets Napster an added $3-4mm a quarter (using 350k members, $15/month, 25% gross margin, range based on the fixed added service expenses).

Tightening in their marketing/customer acquisition program could get them closer to break even on an annual basis, though, it does little to fix the larger strategic issues of being a distant follower.

By: Jon

Jon — Sun, 14 Jan 2007 22:46:00 +0000

As long as Ipod remains popular, I don’t think Napster can do well…

By: Don Wilson

Don Wilson — Sun, 14 Jan 2007 22:28:48 +0000

If I were Napster I would switch to the buy-per-song method and give it’s current userbase 10 free songs for every month they’ve been registered with them. This would allow for a quick switch to the per-song purchase method.

By: hip2b2

hip2b2 — Sun, 14 Jan 2007 22:19:48 +0000

Now the question is what Napster will be doing next? Will it continue to be “just another online music store”?

By: Dave G.

Dave G. — Sun, 14 Jan 2007 22:05:22 +0000

Well, if the customer aquisition numbers are correct…these 350,000 new users should be profitable for Napster. The deal makes a ton of sense for them – they are getting a large base of new users at half price.

By: Jimmy

Jimmy — Sun, 14 Jan 2007 21:58:18 +0000

More customers == higher acquisition value.

By: Isaac

Isaac — Sun, 14 Jan 2007 19:56:02 +0000

This isn’t a bad acquisition at all. Napster will obviously live or die by the profit/loss per customer, and if it takes two more years to break even, they’re probably dead anyway. Adding more customers doesn’t actually make it any harder to achieve per-customer profit (possibly makes it easier), so if they’re betting they can get their margins up, they’re best off doing it with as many customers as possible.

By: Josh

Josh — Sun, 14 Jan 2007 19:33:55 +0000

They cannot continue to survive and lose money every quarter.

Not a good sign when the more subscribers you have, the greater the loss. That is the first thing that will have to change. Consolidating the industry with the acquisition would be smart, accept for the fact that so many other sites offer nearly the exact same service.

There is nothing that differentiates Napster from its competitors.

By: Ben Strackany

Ben Strackany — Sun, 14 Jan 2007 19:20:09 +0000

I have to believe that Napster isn’t so nutty as to buy more market share in a money-losing niche w/o a plan. Maybe that figure they’ll be able to raise prices w/ more subscribers? Maybe they have a deal in the works where they’re able to keep more of the profit?

I assume the labels want Napster et al. to stay afloat. Companies need to be able to make ends meet in this market in order to stick around & keep market share away from allofmp3 or illegal p2p filesharing.

By: Brian Massey

Brian Massey — Sun, 14 Jan 2007 18:59:26 +0000

It would be good to update the Music site comparison done in April.

Virgin is now using Napster as its service and is boasting over $3 million songs. They’re moving aggressively by giving away MP3 players for 3 month commitments at $14.95.

I’ve recently tried Yahoo! music and Urge, and had to resort to burning songs to CD and re-ripping them to MP3 to us across my network and devices. Napster claims they deliver MP3s. We’ll just have to see.

By: David Mackey

David Mackey — Sun, 14 Jan 2007 18:55:37 +0000

I really like the new Napster and use it more than any other to find music I like to listen to. I also like the fact that I can link to any song I like so friends can hear it. I haven’t bought anything from them though, because I’m not a big music listener. That’s why they were smart to integrate ads. I wonder if they allow you to hook directly up to your checking account to pay instead of credit cards? This would help them avoid fees – and for a small incentive might be worth the cost. Is there any way around these fees credit cards charge on small transactions? I understand them to be a decent bit – and on a $1.00 purchase you get barely nothing back (I remember gas companies used to complain about them).

By: EmEhRKay

EmEhRKay — Sun, 14 Jan 2007 18:40:32 +0000

Does anyone know the specifics of Napster’s business model; what licenses they have, agreements reached for payment terms? Because when reading some of the license holder agreements, they seem to say no more than 5% of your gross revenue brought in. I must be missing something…

Thanks.

By: Allen

Allen — Sun, 14 Jan 2007 17:30:48 +0000

> Unlike Rhapsody that just lets you listen to the radio channels, you can actually listen to albums all the way through even if you just have the free account.

But for a mere ten bugs/month with Rhapsody you can listen to anything in their library as many (or as few) times as you’d like with additional charges or penalties–five bucks more and you can do the same with your (compatible) portable device.