Napster losing its subscribers to competing services

Napster losing its subscribers to competing services

Napster Inc. has come out with a disappointing outlook as they just have reported losing around 7 percent of the subscriber of their digital music subscription service.

This comes after the company started promoting their free web service supported with online advertisement.

Napster Chief Executive Officer Chris Gorog went on to say that, he would not rule out a possible sale of the company. He said: “We do not have our heads in the sand regarding an M&A (merger and acquisition) transaction. We continue to receive a lot of interest in the company. We will always carefully weigh any valuation alternative against the opportunity and risk associated with continuing as a stand-alone company.”

Market analyst Kit Spring of Stifel Nicolaus & Co Inc. added: “Napster’s still trying to find a working business model, which is bad from an operating standpoint. But we see an increased likelihood the company will consider a sale, especially since management mentioned it on the call.”