For the second time in a month and a half, Napster Inc. has raised its guidance for its fourth fiscal quarter. The company said Tuesday it expects revenue of between US$16.5 million and $17.5 million for the quarter, which ended on March 31, 2005. The company previously expected revenues of $15 million, while some analysts anticipated revenues of about $14.6 million. Napster said its subscriber base grew to more than 410,000, up about 143,000 for the quarter.
Napster attributes the growth to its Windows-only “Napster to Go” service, which launched with much fanfare in a television ad campaign that debuted during February’s Super Bowl XXXIX. Napster to Go requires subscribers to pay a flat monthly fee in return for the ability to download music to their computers or MP3 players, rather than paying per song or per album as users do with the traditional a la carte Napster service or Apple’s iTunes Music Store.
Napster’s advertising has focused on comparing the cost of its new subscription service to what it would cost to fill an iPod with music purchased from the iTunes Music Store, widely recognized as the most popular commercial music download service now online. Many users rip their own audio CDs or acquire music from other sources, however, which has led to criticism over Napster’s comparison.
Napster was up 0.04 to 6.78, or about 0.59 percent, in pre-market trading on Wednesday.