Napster’s sales prospects waking up
AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREBasketball roundup: Sierra Canyon, Birmingham set to face off in tournament quarterfinals“Napster is very pleased to report sales growth in excess of 100 percent year-over-year for fiscal 2006 as it demonstrates substantial consumer demand for music subscription services and the Napster brand,” Chris Gorog, Napster’s chairman and chief executive, said in a statement. Napster said it closed the quarter with a paid-subscriber base of 606,000, including 59,000 subscribers at universities. Excluding the university subscribers, the company’s premium-subscriber base increased 16 percent from the third quarter and 54 percent from the fourth quarter of 2005, the company said. Revenue from monthly subscription fees and downloads purchased by paid and trial members of the service accounted for about 86 percent of the company’s music revenue during the quarter. For the fiscal year, the company reported a net loss of $54.9 million, or $1.28 per share, compared with a loss of $29.5 million, or 82 cents per share, during the previous year. Napster Inc. on Wednesday reported that its fourth-quarter loss narrowed from the year-ago period as the online music service saw strong growth in the number of subscribers during the quarter. For the quarter ended March 31, Napster’s net loss was $4.4 million, or 10 cents per share, compared with a loss of $24.3 million, or 60 cents per share, last year. Revenue rose 54 percent, to $26.8 million from $17.4 million in the year-ago period. Wall Street’s consensus estimates anticipated a loss of 35 cents a share and $25.3 million in revenue, according to Thomson Financial. Total net revenue increased to $94.7 million from $46.7 million in fiscal 2005. The company said it ended the period with $104.2 million in cash, cash equivalents, foreign currency conversion in-transit and short-term investments. Looking ahead, Napster said it expects revenue to increase to $25 million to $28 million during the first quarter as its recent launch of an ad-supported service ramps up amid the typically slower summer season. During a call with Wall Street analysts, Gorog said the launch earlier this month of the ad-supported Web site, which allows limited free, on-demand access to Napster’s more than two million songs, should help the company build its business. “We believe that, over time, many free users will become interested in trying our subscription service, and what should emerge is a much more informed customer and a customer that is more likely to stay with our service a longer period of time,” Gorog said. Ad revenue from the Web site is expected to become a material contribution to overall sales over the next year, helping to drive down subscriber acquisition costs, Gorog added. Napster shares fell 28 cents, or 7.1 percent, to $3.65 in electronic trading after the income report. Earlier, the stock rose 26 cents, or 7.08 percent, to close at $3.93 on the Nasdaq.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!