February 14, 2007, 12:00 AM

Napster reports record Q3 sales with more hits to come

Napster Inc. reported a record $28.4 million in net revenue for the third quarter of fiscal 2007, up 21% from $23.5 million in the same quarter of fiscal 2006. Subscriber growth and the launch of Napster Japan contributed to the gains, the company says.

Napster Inc. reported a record $28.4 million in net revenue for the third quarter of fiscal 2007, up 21% from $23.5 million in the same quarter of fiscal 2006. Subscriber growth and the launch of Napster Japan contributed to the gains, says Chris Gorog, Napster’s chairman and CEO.

“We expect a healthy funnel of additional new subscribers as Napster becomes AOL’s exclusive music subscription provider going forward,” Gorog says. “Our partnerships with wireless carriers now give us access to over 140 million consumers and the opportunity to attach to the growing global ecosystem of Windows-based music-enabled cell phones. We believe Napster is one of the best-positioned companies in digital music to take advantage of this new phenomenon.”

Other 2007 Napster milestones expected to continue its record growth include launching Napster Mobile on au/KDDI, the second largest mobile network in Japan with more than 20 million mobile phone subscribers. Napster, No. 100 in the Internet Retailer Top 500 Guide to Retail Web Sites, previously announced the launch of Napster Mobile on iMode, NTT DoCoMo’s mobile Internet platform, the largest mobile network in Japan.

Napster also says it will become the exclusive music subscription provider integrated into AOL Music, replacing AOL Music Now. AOL’s more than 350,000 music subscribers have been offered a switch to Napster, and the migration of AOL music subscribers is expected to be completed by March 31.

The online music retailer also has partnered with Virgin Digital to exclusively market Napster to Virgin Digital’s customers in the U.S. that currently use Virgin’s paid music subscription service and paid and free Internet radio products. And Napster Mobile marked its first European launch, debuting on Telefonica’s O2 mobile network in Ireland.

Subscribers downloaded about 500 million songs and more than 700 million music streams in calendar 2006, the company says. Napster’s worldwide paid subscriber base, including university and Japanese subscribers, increased by approximately 48,000 to 566,000 as of December 31, 2006.

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