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 @ 10:41am

    Re: The Economist, 6 July 2006

    Thanks for the current reference. Perhaps I am being too picky, but Apple is not paying more than $0.99 per song, therefore iTMS is not a loss leader. The expression is wrongly applied to iTMS, although I will admit that the intention is the same because iTMS is obviously much work for Apple to generate razor thin profit.

    But a tiny profit is not the same as a loss. And if every website and non-revenue-generating activity is called a "loss leader" then the phrase means nothing. A few analysts use the phrase "loss leader" one time, and it gets cannablized/repeated and taken as gospel...

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