Napster Ups Revenue Projections

By Richard Menta 3/03/05

Despite our reservations about the effectiveness of Napster's investment in a Super Bowl ad it looks like the company's Napster To Go program is having some success. Today Napster announced that they are raising revenue guidance for the quarter that will end March 31, citing increased subscriptions to the service.

The company is projecting $15 million in expected revenues, up from a prior projection of $14 million for the quarter.

Richard Menta

"Since the launch of Napster To Go, we have experienced exceptional demand for all aspects of our business", said Napster CEO Chris Gorog in the company press release.

Gorog credited cross marketing with several MP3 portable makers for some of this increase. Continued Gorog "A positive reception to compatible MP3 players from iriver, Creative and Dell is also fueling demand. For example, within hours of launching a Napster To Go promotion with iriver, we sold out of the 'bundles' and added a significant number of new, year-long subscribers".

These manufacturers are also looking to steal market share from the dominant iPod as Napster aims for iTunes market share. All sides have adopted Microsoft's Janus technology, which allows the rent-a-song business model of Napster's to extend to portable players.

The Janus technology essentially turns Napster into a subscription radio service where the consumer chooses which specific songs they want played. The downloaded files have a life of one month, where they will become unplayable unless the consumer continues to pay a monthly fee. If the user keeps paying the songs remain active, otherwise they become dormant.

Napster offers an all-you-can-eat program for $15.


iRiver H10 5GB Audio Jukebox is available on Amazon

Other MP3 stories:
iPod Shuffle Shortage Continues
Can Free Broadcast TV Really Be Napsterized?
iPod and Other MP3 Players Go Mainstream