Revenue at digital music download retailer Napster Inc. grew 34% in the first quarter of its 2007 fiscal year, reaching a record $28.1 million from $20.9 million a year earlier, the company reports. Sales were up 5% from the preceding quarter.
Net revenue for the first quarter of 2007 includes $1.9 million of one-time revenue from prepaid card breakage.
Net loss was $9.6 million for the first quarter, compared to a net loss of $19.7 million in the first quarter of fiscal 2006.
"Our first quarter was highlighted by record revenue and the launch of our new Napster.com advertising-supported free music service, which is off to an encouraging start as we saw an over 50% increase in monthly unique visitors and ended the quarter with a run rate of 60 million page views per month," said Chris Gorog, Napster's chairman and CEO. "Our new free service should lead to lower subscriber acquisition costs and improved subscriber retention while building advertising revenue."
Napster also reported that its subscriber base declined 7% from the previous quarter, attributable to its shift to advertising-supported free music. As of June 30, Napster's total paid subscriber base was 512,000, including 4,000 university subscribers—most Napster university subscribers roll off during the summer, the company says. Excluding university, the number of paid subscribers grew 26% year-over-year.
Napster is No. 100 in the Internet Retailer Top 500 Guide to Retail Web Sites.
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