Napster, Still Struggling, Puts Itself Up For Sale

from the shocking dept

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.

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  1. identicon
    just ®idiculous, 19 Sep 2006 @ 11:33am

    when has Apple called iTMS a loss leader?

    Apple doesn't refer to iTMS as a loss leader, because its not losing money. I've only seen the term used by journalists, analysts and bloggers, all of whom are either content to just repeat each other, or else too lazy to read the source/s and draw their own conclusions.

    Even the Economist article referenced above, quotes a prominent Apple analyst, but it had to dig back to 2003 (when iTMS was only 2 years old) to find a quote that supports the 'loss leader' proposition - because that analyst's more recent statements do not support the notion.

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