SmartMoney: Napster is a snooze, gushing money and renting music is un-American anyway
Wednesday, July 06, 2005 - 02:57 PM EST"Did you hear? Napster s going to use Dell PowerEdge blade servers in its effort to provide universities with legal music downloads," Monica Rivituso writes for SmartMoney. "Finding it tough to contain your excitement? I know! I felt the same way when I heard the news on Wednesday."
"I jest. The announcement was meaningless. And yet it boosted Napster's shares by 2% early Wednesday (though the stock was down fractionally at 3 p.m. EST along with the broad market's selloff). Such is the way of this digital-music subscription service, darling. Anything can move its stock," Rivituso writes.
"Napster still strikes me as a lousy investment. The company is gushing money. In its fiscal fourth quarter, ended March 31, Napster posted a loss of $24.3 million, or 60 cents a share. While that was narrower than the 62 cents that analysts expected, it was far worse than the $6.57 million, or 20 cents a share, it posted a year ago. Revenue rose 188% to $17.4 million, slightly better than Wall Street's forecast. But management said that it figured the company would lose 62 cents to 64 cents a share, in its fiscal first quarter — worse than the 55 cents analysts expected. Gushing, indeed," Rivituso writes.
"All this talk about subscriptions has me thinking: Is that what we as a country are about — renting? What would our president say about all this? George W. Bush has cobbled together a basic framework for curing Social Security's ailments based on something he calls the 'ownership society,'" Rivituso writes. "And yet Bush's private accounts proposal seems to be dead in the water. So we won't be "owning" our retirement security anytime soon. And now Napster is suggesting that we should relinquish ownership of our Metallica, Gwen Stefani and 50 Cent tunes, too? What kind of message would this send to our children? Renting music would be a crushing blow to our national psyche. It would be, dear friends, un-American."
Full article here.
MacDailyNews Take: Snooze, joke, whatever. Read the full article, it's full of common sense which is a rarity when it comes to Napster analyses.
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Un-American INDEED!