Napster and Tower Records unveiled a joint venture Wed. to launch...
Napster and Tower Records unveiled a joint venture Wed. to launch Napster’s popular digital music service in Japan within a year. The partnership will work at first out of Tower’s Tokyo hq under its own board. The announcement marks…
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Japan as Napster’s next major market after the U.S., U.K., Canada, and soon-to-be-launched Germany, the company said. This is the first time the digital music company has set up a joint venture to launch service in a country. Tower will contribute up to $7 million and undertake additional funding obligations in exchange for about a 70% majority equity stake in Napster Japan. Tower will also provide most of the management team, plus local music content and extensive marketing for the service through its 108 retail stores and its websites. Napster will pitch in up to $3 million, plus its technology platform and music library for a 30% stake in the new venture, the company said. Meanwhile, Napster announced its 5th consecutive quarter of double-digit revenue growth. Revenue from continuing operations for the first quarter of 2006 grew to $21 million, 167% over the prior year quarter and a 21% increase from $17.4 million in the 4th quarter of 2005, the company said. Net loss was $19.9 million for the quarter. For the 3-month period ended June 30, paid subscribers -- excluding university subscribers on summer break -- grew by 13% quarter over quarter and almost 300% from the previous year. Not counting college deals, Napster’s subscribers grew from 356,000 to 402,000 during the quarter. Napster ended the period with $126.6 million cash and $14.2 million worth of Sonic Solutions stock.