May 17, 2007, 12:00 AM

Napster turns up sales growth, turns down losses

Napster reported net sales of $111.1 million for fiscal 2007, up 17% from $94.7 million in fiscal 2006. The online music retailer trimmed its net loss for fiscal 2007 to $36.8 million, compared to $54.9 million in fiscal 2006.

Napster Inc. reported net sales of $111.1 million for the fiscal year ended March 31, up 17% from $94.7 million in fiscal 2006. At the same time, the online music retailer trimmed its net loss 33% for fiscal 2007 to $36.8 million, compared to $54.9 million in fiscal 2006.

Napster, No. 108 in the Internet Retailer Top 500 Guide, attributes fiscal 2007 sales growth to multiple sources, including subscriber growth and the launch of Napster Mobile on the iMode mobile Internet service of NTT DoCoMo, Japan`s largest mobile phone network. For fiscal 2007, Napster’s total worldwide paid subscriber base was 830,000, including university subscribers, Napster Mobile subscribers, Napster Japan subscribers and the AOL Music Now subscribers who transitioned in March 2007. Paid subscriber numbers grew 37% year-over-year.

For the fourth quarter of fiscal 2007, net revenue was $29.1 million, up 9% from $26.8 million in the prior year quarter and up from $28.4 million in Q3 of fiscal 2007. Net loss for Q4 of fiscal 2007 was $8.5 million, compared to $9.5 million in the third quarter of fiscal 2007.

Deals with AT&T; and Motorola are expected to place Napster at the forefront of cell phone-based music sales, says Chris Gorog, chairman and CEO. “Looking ahead to fiscal 2008, the company will remain deeply focused on bottom-line improvement and will continue to capitalize on our strong market share position as we enter the new era of music-enabled cell phones. We expect this trend to be a substantial contributor to Napster’s future growth based on our partnerships with the leading wireless carriers and handset manufacturers worldwide.”

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