Speculation about the future of subscription-based download platform Napster continues amid reports that the company’s management are trying to engineer a takeover, possibly to put the digital music firm into private ownership, or maybe to make it part of a wider group of entertainment or web companies.
Some of the new speculation follows a recent statement issued by the digital firm’s management to their shareholders, which in part addressed concerns raised back in June by three renegade minority shareholders – Perry H Rod, Thomas Sailors and Kavan P Singh – who publicly criticised the way the company was being run and suggested it would be worth more to investors if it were closed down.
Responding to those shareholders objections, the management statement said: “The dissidents have offered no specific business plan, other than suggesting a vague review of Napster’s business, and have not shown they can contribute to enhancing stockholder value. The dissidents have no significant ownership in Napster and, in fact, have been frequent sellers of Napster stock”.
The letter added that “[finance firm] UBS has been actively advising the company with regard to possible strategic alternatives”, which some reckon is a sign the board are proactively seeking a new owner.
The legit Napster, of course, has never quite caught the imagination of the wider downloading public, despite the brand’s heritage, and certainly is not doing as well as many assumed or hoped it would be in its early days. The fact most of its services are not compatible with the market leader iPod has never helped, plus the firm’s decision to concentrate primarily on the subscription based business model – which a number of other players, including HMV and Virgin, have failed to successfully get off the ground – has also been a weakness.
That said, many in the industry still reckon subscription based services, rather than the a-la-carte pay-per-track system operated by iTunes et al, are still the future, and as Napster have – unlike most of their competitors – enjoyed some success in this area, some think if Napster can just stay afloat in the short term it could come good in the long term.
Though, of course, with the launch of Nokia Comes With Music and plans by BSkyB to launch a subscription service, this part of the digital music market is about to become much more competitive again, and it remains to be seen if Napster, who do have the most experience in this area, but who have never quite managed to communicate the excitement that should really come with what was once a credible, renegade brand name, can transform their fortunes or whether they’ll just disappear without trace. The financial boost of new ownership, or strategic boost of becoming part of a wider entertainment group, could both aid Napster’s attempts to lead the potentially expanding subscription service market.
