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More people subscribing to a losing business: thats how you go out of business even faster!

I was wondering when this was going to make its way to MDN. What kills me is that people are investing, but can someone help me understand something? The more money Napster makes, the more they lose. How is this a viable business model?

Gee, the "new" improved, commercial Napster posting a loss 3 month loss of over $24 million - what a shock!

Now that Yahoo and everybody's bodies mother is trying to sell music downloads, the fiscal bleeding at Napster will go from this flow to a gusher.

With so many "smart" people with various B' school degrees and shit you'd think they'd realize there was a reason why no one made money on music downloads prior to Apple with iTunes+iPod 1-2 punch.

Cheers!

Oh, I forgot to add that Napster has 412,000 subscribers to its services. So, I wonder how many subscribers they added after their weak Superbowl commercial? How long is it going to take before Napster bleeds dry?

My, what an impressive rate of "burn through". Good luck getting a VC to spot you more cash when it's all gone, Mr. Gorog.

Yeh-heh-hesssssss. That sound you hear is Napster's bottom line sucking more every day.

And here I thought they'd at least be around longer than Buymusic.com. Actually, come to think of it, when he takes center stage in new technology I think Chris Gorog has about as good a track record as Scott Blum. Yeh-hesssssss. They both excel at sucking. And they're both good enough . . .

FOR APPLE TO POOP ON!!!!!

So we're supposed to get excited that revenue rose sharply on strong subscriber growth. Okay, so revenue increased 188% - it nearly tripled. The net loss for the quarter was 60 cents a share. A year ago, the net loss was 20 cents a share. It tripled. So they took more people's money, and lost even more than before. That's good?

hilarious.. subscribers who are paying for streams of a business that is very quickly going down the sh**ter

are they the ones who called iPod owners idiots? Man.. out of touch?

I wonder though...when napster goes out of business, will the subscribers still have the thousands of songs on their mp3 players?

yeah, i was wondering the same thing... how hard is it for a user to circumvent the napster copyright protection... will all this people see their downloads evaporate when napster goes under???

Reuters reports. "Napster posted a net loss of $24.3 million..."

Damn, that's gotta hurt.

Having fun yet, Chris?

MaWo: 'research'. As in, "Napster should have done more."

Doesn't this remind you of the great internet stock market where companies kept losing money quarter after quarter but people kept buying the stock nonetheless. While I have nothing against napster and their subscription model, I hardly see this scenario continuing as a viable business model

If Napster does go out of business and their subscribers music collections disappear into the vapour overnight, there will be a lot of angry people making a lot of noise! As a result, the subscription business model - in a cut-throat market - will be viewed as something to steer well clear of... especially if you value your music, your time, and your hard-earned cash.

Hey, the name of the business model is Napster-to-go, and it will do just that, go.

1. Remember that Apple says it profits from the hardware, not the iTunes music downloads. How can others undercut iTunes prices and still succeed without paying the music labels less?
2. It is not in M$'s best interest to let Napster bellyup, because it would mean a failure for their technology.
3. Somehow, Napster will begin to turn a profit. It needs an anonymous investor to prop it up!

1. Remember that Apple says it profits from the hardware, not the iTunes music downloads. How can others undercut iTunes prices and still succeed without paying the music labels less?
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It's worse.. the iTMS is making a profit. Apple can run losses if they want but the iPod will keep the money pouring in..

They're being competitive by adding cool new features and expanding the usability of what is .. actually.. DRM'd music.

People have spent 15 bucks a month for the last 4 months.... and have also bought a player that won't work with the iTunes store....

And in the end for this "free for all"... they'll have nothing to show for it...

Idiots.

MDN word: Use... as in "won't be able to"...

Napster are in deep shit.

Roxio sold all it's assets to just conentrate on Napster - they have now painted themselves into a corner and can't get out.

Just a matter of time when they go under now...

I give it 2 years max.

And what is the churn rate?? I guess you could find up to half have already thought better and cancelled after one or two months.

Wait 412,000 suscribers? weren't they at 400,000 at the first of the year? they added a whopping 12,000 suscribers during that time. yet Apple is selling 50 million songs a month.

hmm I know which way to go.

Steve Jobs was right all along - music subscription services are not a viable business model.

Now movie subscriptions is another matter... and Stevey and Apple know this and will probably announce something this year (fingers crossed).

I think we Applephiles should be less smug about whether the subscription model will work or not.

Clearly there are problems with the subscription model--the hijackability of streaming audio, for example. But there are also benefits to users, like being able to sample albums before purchasing them.

If Napster and/or Rhapsody fail, and they very well may, I don't think that the business model is necessarily the reason.

As I posted yesterday, Yahoo! has a good shot of succeeding with its subscription/per-song hybrid b/c it has a built-in user base that Real and Napster really can't compete with.

Apple may be wise to sit-out this round, but at some point should consider whether the subscription model could help them add to their own user base.

There are a lot of unknowns here, and we (and Apple) cannot be so convinced of our righteousness that we miss out on good business opportunities.

Agreed - they are in deep, deep doo-doo, and Yahoo's move has put them in a genuine catch 22. If they try to match Yahoo's price point the revenue they've been bragging about will go poof, and they will fail to live up to their revenue guidance (and we know how much Wall St. loves that!). If they don't adjust their price, they are going to lose customers to Yahoo, who are offering essentially the exact same thing for much, much less, and once again their revenue will suffer. It must be a pretty tense environment over there just now.

And when they do fail, I wonder what will go on in the minds of their 412,000 subscribers? Will they be keen to sign up with Yahoo after seeing their music libraries suddenly vanish, or are they going to decide that maybe owning their music was a better idea after all?

Ha ha! There is an big message up at the Buymusic.com site that talks about their "sister" service Yub.com, where you can get discounts and earn rewards at other stores. One of the sites mentioned is iTunes!!! Ha ha HA hAA HAAA!!!!

If one of these rental music services goes under, I think it will have a domino's effect on the other rental music companies that can't hold it together.

Napster and Real are both obviously teetering at the moment. I'll be shocked if either music service is still around by year's end. Maybe Napster should have saved some of that money they wasted at the Super Bowl...

Hey, let's "Do the Math"!

$24.3 million loss + competition from Yahoo + no iPod support = Napster gone!

This just in:
Krispy Kremes' executives were ordered to direct all efforts to maximize donut output. All other orders were temporarily put on hold. All delivery vehicles were directed towards one buyer: RealNetworks