Napster Raises Revenue Forecasts
2005-04-05 13:33:00
Napster Inc. on Tuesday said its subscriber base grew by more than half in the fourth quarter, prompting the company to raise its revenue forecasts.
The Los Angeles-based online music seller said it added 143,000 subscribers in the fourth quarter to up the total to more than 410,000, including 56,000 university subscribers. As a result, the company said it now expects revenues between $16.5 million and $17.5 million.
Napster's subscriber increase represented a 53 percent jump from the third quarter. The company said subscribers to its rent-a-tune subscription service have also been using its pay-per-download offering, contributing to the boost in revenue.
With the subscription service Napster To Go, subscribers pay $14.95 a month for unlimited downloads from the online music store's catalog of a million song tracks. The music plays on any device that supports Microsoft Corp.'s Janus copy-protection software found in Windows Media Player 10.
Most subscription services today only allow music to be played on a computer, but Napster takes it a step further by letting consumers take their tunes with them. Music downloaded through the service, however, cannot be burned onto a CD, and subscribers have to link up to the Napster site at lease once a month, or the songs will expire and will have to be reactivated.
With its new service, Napster is taking a different tack in attacking the market dominance of Apple Computer Inc.'s iTunes music service, which sells songs for 99 cents a piece, and albums starting at $9.99. The music can only be played on one portable music player, the Apple iPod.
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