Slippery Quarter: Napster Revenues, Profits, Subscribers Fall

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Napster suffered a difficult second quarter, despite a recent shift towards MP3s.

For the fiscal first quarter ending June 30th, the company witnessed drops across revenues, income, and subscribers, three critical metrics.

Specifically, revenues slowed to $30.3 million, down from $32.3 million during the year-ago period.  Losses also widened, slipping to $4.4 million, down from $4.2 million previously.  On the subscriber front, Napster reported a total of 708,000 takers, down from 760,000 at the start of the period.

The downer quarter raises questions about the impact of the DRM-free catalog, triggered on May 19th.  During the call, Napster chief Chris Gorog pointed to “positive trends for Napster with increases to visitation and user engagement,” though broader gains appear missing.  In a discussion with Digital Music News on Monday, the company also declined to disclose paid download figures.

Napster has also been rumored as takeover bait, though nothing substantive has emerged.