Napster Touts Revenue Gains; Profitability, Licensing Questions Remain

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Napster continues to boost revenues, but profit and licensing issues remain.

Ahead of a formal earnings call, the company pointed to recent-quarter revenues of $31 million, a figure that falls at the high end of earlier guidance.  That contributes to a recordrevenue level of $127 million for the fiscal year ending March 31st, a figure boosted by a  reported subscriber base of roughly 760,000.

The group also pointed to a third-place, revenue-based ranking among competing music stores.  The ranking was recently offered by MultiMedia Intelligence head Mark Kirstein, formerly an analyst at both iSuppli and In-Stat.

The revenue picture offers some encouragement, though profitability and licensing issues are clouding the picture.  During the recent, third quarter ending December 31st, Napster posted a loss of $9.5 million, a substantial sum.  On the positive side, that represents a narrower drop from a year-ago quarterly loss of $17.0 million.

Separately, the company is now pushing to convert its catalog into a DRM-free offering.  The company initially offered guidance for a transition this quarter, though recent executive comments suggest a slower-than-expected licensing process.  On Thursday morning, a representative reaffirmed a current-quarter transition schedule to Digital Music News.