A 104% increase in sales is music to Napster’s ears
Napster Inc. is whistling a happy financial tune. For the fiscal year ended March 31, 2006, Napster, No. 100 in the Internet Retailer Top 500 Guide to Retail Web Sites, grew sales to $94.7 million, an increase of 103% from $46.7 million the previous fiscal year.
For FY 2006 Napster’s net loss from continuing operations before income taxes was $59 million compared with a net loss from continuing operations before income taxes of $67 million in fiscal 2005. “Napster has carved out an important strategic position in the industry by offering music fans complete freedom to choose the way they experience music—from downloads for both portable and PC-based subscriptions to a cell phone experience via Napster Mobile," says chairman and CEO Chris Gorog.
Subscriber revenue, which consists of monthly subscription fees as well as downloads purchased by both paid and trial subscribers, represented approximately 87% of music revenue in the fourth quarter, compared with 86% in the preceding quarter, Napster says.
On another note, Napster is adjusting its business model. Earlier this month Napster unveiled a redesigned interactive and ad-supported site. As part of the new site, the company now will allow members to listen to all songs in its library up to five times online for free. Basic Napster.com membership is free. The free songs can be played online at the site but cannot be downloaded without purchase. “The new free music experience at Napster.com is generating strong interest from the advertising community and is creating a new viral awareness for Napster across the web,” Gorog says.
Napster`s total paid base is 606,000 subscribers, including 59,000 university subscribers, the company says.
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