Toast maker Roxio Inc. has posted its second fiscal quarter results, for the period ending September 30, 2003. Roxio is less than a week away from re-launched famed music sharing service Napster, this time as a legitimate commercial music downloading service set to go head-to-head with Apple’s own iTunes Music Store.
Roxio reported net revenue of US$22.8 million, a $5.1 million year-over-year drop. The company posted a net loss of $11.9 million for the second quarter, compared to a $1.8 million loss for the same quarter a year ago.
Roxio Chairman and CEO Chris Gorog lauded his company’s release of Toast 6 Titanium, the latest major version of its CD and DVD burning software for the Mac. Gorog noted that Toast 6 Titanium became the best-selling third-party software for the Mac on Amazon.com. He noted that the company has planned a new version of its Creator digital media suite for Windows for the first calendar quarter of 2004, which will integrate Napster 2.0 as well.
The current release of Roxio’s Windows-only digital media suite is what the company is pinning its financial hopes on for the fiscal fourth quarter, according to Roxio CFO Elliot Carpenter. Carpenter indicated that Roxio is in the midst of a tough quarter: The remainder of the third quarter will see the company “clearing the retail channel” in anticipating of that new version mentioned by Gorog.
As a result, Roxio anticipates seeing a sequential quarterly drop in revenue to about $14 million, followed by a rebound to $25 million in its fourth quarter, with a corresponding return to profitability in the fourth quarter.
How will Napster’s relaunch affect Roxio’s revenue? Carpenter offered the following: “While we are not providing pre-launch revenue or loss per share guidance for the online music division, we plan to provide a mid-quarter update and then detailed financial guidance for our online music business when we report results for the December quarter.”
Napster 2.0’s relaunch is set for October 29, 2003. The Windows-only service will provide users with $0.99 downloads and a 500,000 song library — larger even than Apple’s, along with a “premium” service that provides additional features. Roxio partnered with electronics maker Samsung to offer a digital music player especially designed to complement the Napster service, much like iPod and the iTunes Music Store. That device is available in retail stores now.