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Roxio To Concentrate on Online Music Business
DevGhost writes "Roxio Inc. said on Monday it would change its name to Napster and focus on the money-losing online digital music service, selling its profitable CD and DVD software division to Sonic Solutions for $80 million."
This is what happens when you let an MBA run an organisation.
Norman Cook's Ode to Sl
I wonder how many of the board of that company also moved with the profitable portion of the company, leaving the employees and the unpopular directors and managers with the loss making portion?
Roxio commits corporate suicide. Film at 11...
You mean that the 3 copies of Toast that everyone pirated didn't keep them alive?
Board member #1: "Hey, let's sell our profitable division so that we can focus on one that will never make money ever."
Board Member #2: "Brilliant!"
Napster on the stock ticker... who would have thought that was going to happen 5 years ago?!
First Adaptec, then Roxio, now Napster.
Boy they're sure good at picking business models. Funny how an individual who changes professions every few years is viewed badly upon by creditors, yet companies who go through disposable business plans the same way are "innovative".
On the good side though, I think this will be their last name change before Chapter 11(, Inc.). Seriously, what part of focus on the money-losing online digital music service, selling its profitable CD and DVD software division doesn't sound like the bubble all over again.
Bah... whatev. Just as long as someone keeps supporting Toast, I won't yell too loud.
2) Focus on money losing division
3) ???
4) Profit!
I like their moxie!
...but how does it make sense to sell the profitable part of a business and keep the unprofitable part? "Focussing" on the unprofitable part to try and fix it, yeah, I can see the sense in that, but getting rid of the bit that keeps the money coming in while you sort the problems out?
Insanity!
Game dev and music blog
I quit my lucrative job in IT to begin selling igloos to Eskimos.
Gamingmuseum.com: Give your 3D accelerator a rest.
I actually like EZCD better than RecordNow. Bummer it will be going away.
I was waiting for Napster to die again.
Cretin - a powerful and flexible CD reencoder
I wonder if they are going to drop Toast, their CD burning software. Granted, CD-burning capabilities are built-in to OS X and Win XP, but the options there are pretty limited. I always use Toast when possible.
Adaptec != Roxio. Adaptec sold their EZ-CD Creator cd-burning software to Roxio, but they aren't the same company.
Hokey statistics and ancient misconceptions are no match for a good thought in your head, kid!
mayb the corporate record label oligopoly wants to ensure that on-line music distribution fails. attack apple as a monopoly (?) and snipe every other service one by one..
April 1st isn't for another 9 months.
Why music industry chose to kill Napster a few years go?
--
Board Member #3: ??????
Board Member #4: "Profit!"
I don't understand why anyone would think this is a good move. The "Napster" brand is surely well known. But it's well known because the original Napster allowed people to trade music for free. Now they're known because they lost a series of cases and were sued out of business. Due to this publicity, everyone knows that any new Napster will not be the same "Napster" of old -- you're going to have to pay, pay, and pay some more.
So why stick with the brand? They might as well call it "Enronster".
There must be something deep in the marketing mind that I don't understand -- and I hope it stays that way.
Is it April 1st already?
--Mike
So Roxio is getting out of the burning business and into the burning money business and Sonic Solutions is taking on more interest in the non sonic profitable areas. I know I'd rather have some stock with :-D
Microsoft will buy Ahead/Nero and integrate it into Windows we can call that category dead as well. Roxio - EZCD = t3h b4nkRup+ soonly.
What idiots - sounds just like the good old dot.com days. I worked at a company like that where there was a single mainstay product that was profitable, and a bunch of junky websites that were not. Roxio sounds just like that, only they just threw out their single profitable tentpole.
And now they are throwing themselves solidly in the path of several oncoming trains in Apple, Microsoft, and Sony.
Short this pig!
...that they use to make their media software so gosh-darn reliable and redirect it towards making napster more impossible to uninstall.
EZ CD will always cause problems on your system. As soon as I see that on a system, I can guarantee it "acts up" one way or another.
Horrible stuff, and not terribly useful except to complete N00b's. And of course, they're the ones who can least deal with the problems cause by EZCD.
Why are we and the editors assuming this is bad? I'm sure they have people who know the details and have predicted future markets to justify this. Just because one is profitable and one is losing now doesn't mean it will be the same 5 years from now. Hell, if the headline 20 years ago said IBM would sell off it's profitable typewriter business and focus on it's losing computer word processing business would everyone have said it would be stupid?
would be to get Apple together with Toast and Jam. Hopefully, Steve will gobble them up. It makes me hungry just thinking about the possibilities...
I read the headline and article and thought it had to be April 1st! Really, there's only so much room for so many online music services, with margins that seem rather slim, not sure how many can fit in this small/leaky boat!
CSVB
free ipod and free gmail!
Napster Bankrupt; selling assets at firesale prices.*
...going out of business faster.
Sounds like the old Napster.
I had to rub my eyes to make sure the news was real... I bet there is a really good story behind this. What does Roxio have that Apple and Microsoft don't? Roxio has links with every CD/DVD hardware manufacturer. It's software is embedded in XP. How does the market for online music compare to that of CD/DVD recording software (hmm, its sort of related...). The answer I bet will be in the Sonic Solutions documentation. What are the caveats to the sale? The folks at Roxio aren't dumb... they've done quite well.
Visit Tim's Journal, yes?
What if Microsoft bundles a DVD/CD - burning program with LongHorn? Then this might not be such a bad idea for Roxio. The software is great but if microsoft is playing the browser-war with burning software then its potentially a good thing for the ROxio company.
Also to consider are new DRM rules. Roxio could have to do major upgrading to the software to enable proper DRM and even then Microsoft/MPAA could decide its not good enough.
What is a great product now does not mean that it will always be the best. You have to admit that CD/DVD burning software is kind of a one-trick-pony-kind-of software that does not have great potential for growth. Sooner or later Microsoft will start to integrate burning capabilities like Apple.
Also another thing to consider is with growing HD sizes CD burning I am assuming is decreasing. also with MP3 players, which I am assuming will lead to MP3 car players, CDr's could potentially.. gasp.. die. Leaving ROxio with a sinking ship.
Just some thoughts as to why they would do this drastic move
I predict in approximately one year Napster will be renamed yet again to Microsoft Music or something to that effect. Microsoft likes to compete, especially with Apple.
When I first read the description, I thought this article was sarcasm. I'm saddened to find out that it's not.
Not good. Roxio isn't going to make it. Apple iTunes is about one or two competitors from being the permanent market leader.
Persoally I dont see apple has a chance in heck of making it. There competitors are waiting watching while apple (Still a small company however many ways you look at it) builds in and spends there 4billion fortune building up a large music business to see how it pans out the BOOM napster sneaks in with the same products and services but just a little cheaper and suddenly Apple goes chapter 11.
They say the bigger they are the harder they fall well we are all waiting for apple to grow too big for themselves, and it wont be too long now. the first in a market are NEVER the ones to corner it/.
Brilliant. Yes. I thought exactly the same thing. But you put it into words much better than I could have.
Hang on a sec - didn't Adaptec spin the software unit off and create Roxio? Or am I remembering things wrong?
"I don't get it." -- ObviousGuy
When I read the writeup I seriously thought that it was a joke, then I read the article. Wow.
Hey, what's up with slashdot posting all the 4-line articles today?
- "Nobody came out that night, not one was ever seen. But Old Man Stauf is waiting there, crazy sick and mean!"
I believe you meant "selling iceboxes to eskimos." They might actually have a use for an igloo, as long as you can show that yours are a superior value over the homebuilt variety.
Raises capital- ie money you can use to invest or buy things to make more money.
Someone no doubt sat down and figured out how much money Napster could potentially make, and how much Toast etc would make.
It could be that profits are leveling off (since OS X supports CD/DVD burning decently, that wouldn't be surprising) and so the company is taking a chance. Selling off their existing products gives them a lump of cash to use for working on Napster- something like, say, a stupid Superbowl commercial.
Please help metamoderate.
Dude, read the article. They are selling their software biz. The folks who are purchasing it claim that they are going to keep that part of the business more or less intact.
I didn't know it was April 1st again so soon...
If you pay your bills on time and have reserves (money in the bank), changes in profession aren't viewed badly upon. It's when you're changing your profession and you've had late car payments and you've got $3000 to live on...
Let's say Napster needed $50m in cash in the next three months to be able to put together a plan to become a major contender in online music distribution networks. Maybe they need to pay $5m to each major label, get a huge server farm, whatever. They know what they need, but they don't have any capital. Selling the profitable division is a good business idea if through this change, Napster can become wildly profitable.
Whether that is going to happen or not, I don't know. Napster has name recognition on one side, but then again you don't think "legal downloads" when you think Napster.
If, however, Napster spends most of the $70m in cash that it's going to get on Super Bowl ads, then yes, they learned nothing from the
Small potatoes make the steak look bigger.
I'm sure someone got a promotion for this great idea.
Thanks for Toast. I hope Sonic keeps up the good work.
it's hard to say for sure. They may have very legitimate reasons for doing this. The CD/DVD software side of the business might be in decline and headed for unprofitability, so they're cashing out while they can. They may also have deals and/or plans on the napster side they're not disclosing publicly that make this decision rational. Those deals with universities are an example. Another possibility is that they have a completely different (and very profitable) project they want to try and need the cash to be able to do it.
Of course, another possibility is that they're complete morons who are giving themselves a cranial enema. Only time will tell.
Napster sneaks in? Hate to break it to you, but Napster has marketing deals and partnerships, and is still FAR behind Apple.
- oZ
// i am here.
iTMS isn't the first in the download-for-pay market, though. I doubt Apple's leadership would let the store eat through all their money before killing it anyway.
Wishful thinking on your part.
Sounds like a standard /. April 1st story.
2) CEO and major board members retire wealthy, leaving mess for someone else to worry about.
3) Tell next victim how the previous company tanked without your guidance.
Sounds like MBA standard operating practices 101, the college class than can be substituted for ethics. The next CEO will just inflate earnings, claim huge savings by outsourcing, hide losses and try to bail before their caught.
There's a sucker born every minute.
You'll know they're serious when they hire Lars as spokesperson...
This comment does not necessarily represent the views and opinions of the author.
So they decide to get some cash and shares ("Roxio will receive $70 million cash and $10 million in Sonic shares") and look to invest in a business where growth is possible - and that's on-line music distribution.
So long as they don't fritter away their cash pile they should be able to turn a handsome profit and achieve significant growth.
On-line music distribution has the potential for big bucks because companies are able to charge, and consumers willing to pay, CD-prices for something as cheap as electronic files - the consumer pays for the PCs, MP3 devices and even the distribution channel (the 'net). Roxio/Napster gets to globalise a low-cost business model (bling!), leverage the Napster brand both on-line and badging the p***-poor, but cheaper, iPod alternatives (bling!), consumers feel cool (bling!) and the record industry gets to pay its (mainly) US stars big bucks for doing as little as the do now (bling!).
It's bling-bling all round! Hooray!
Of course, I will miss talking to those record shop sales staff who, over the years, have turned me on to all kinds of different music (Television, Foo Fighters, etc.) - and cool UK bands will have trouble acessing these new 'net-based distribution channels without a fight - but hey, who needs human interaction and good (i.e. not-rap;) music when we can let Napster rip us off in the comfort of our own homes!
Let's buy something money draining, and get rid of the profitable enterprises.
They should have changed their name to 'Rapster'.
In other news, Sonic Solutions has acquired the former assets of Roxio, and has changed its name to "Roxio." The remainder of Sonic Solutions assets have been sold to the former Napster, now changing its name to "Sonic Solutions."
What I want to know is whether Sonic was smart enough to grab the "Roxio" brand name along with the software?
[ReidNews]
When a business is run well, and has success, as the result of a hard working MBA, it doesn't exactly make news.
We now return to our regularly scheduled propaganda.
Selling something can be a good idea.
Lets say someone offers you $80 million for a company.
1. If you think it is worth more than $80 million, you should not sell it.
2. If you think it is worth less than $80 million you should sell.
Apparently they took option #2.
Profitable doesn't automatically mean worth more than the offer price.
you know, throw/kick the ball as far as you can toward the goal and pray someone on your side makes a great play with it.
"Calculated risk" is indeed a business model. Almost every business that isn't funded by a trust is based on risk of losses. It's not like they are shuttering the profitable business, they are cashing it out and throwing everything into what is obviously a make-or-break play. Maybe CD burners are boring. Maybe there are no great business opportunites left worth fighting over. Maybe someone is rich enough to want to play with some money.
It isn't insane, it's just risky. I happen to think it is insanely risky, but that's just me. Still if I were sitting on a cool $80M with everything to lose and not much to gain I would give myself a nice salary, make a great try at stardom, and if it went down badly I'd buy an island in the South Pacific and retire to study beaches and waves.
And how insane is that, really?
=^..^= all your rodent are belong to us
Well, guess I was half-right - I knew they didn't just change their name to Roxio, but I didn't know they were a spin-off company. Everything I read about it make it seem like it was sold off to someone else.
Hokey statistics and ancient misconceptions are no match for a good thought in your head, kid!
*checks date*
C'mon guys, It's not April 1st...
Why Do Companies Commit Financial Suicide!?!?!
Colin Dean Go a year without DRM
Who ever said Apple was the first? MP3 players were out long before iPod but they just kinda sucked. There were several places on the web you could buy music before iTMS but they just kinda sucked.
With Apple you get get iPod - cool.
With Apple iTMS which now has 1 million tracks - cool.
With Apple you get iTunes Jukebox - cool.
With the sucess of iPod you now have other companies such as altec langsing and alpine making stuff to connect to my iPod - cool.
Sounds to me Apple is making one large package that works. Also didn't Steve Jobs already say there is no money in selling music on the net? Isn't Apples money comming from iPods - so where does Napster expect to find the big bucks?
So no employees being screwed over. If anything they will now be in a company that wants to do software not be a music distributor.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
What if Microsoft bundles a DVD/CD - burning program with LongHorn?
Windows XP already has CD burning capability. Guess what? It's licensed Easy CD Creator code from Roxio. Check the Version info on C:\Program Files\Common Files\Adaptec Shared\CreateCD\CreateCD50.exe (the folder name is left over from when Adaptec owned Easy CD Creator).
In other news, Starbucks will sell it's profitable business and concetrate on taking over the money-losing Kmart chain.
James Napster, Kirk Napster and Robert Napster were all unavailable for comment at the time of going to press.
Lars Napster was available for comment (as usual) but since no-one ever listens to the loudmouth twat drummer anyway, we didn't either.
The band are about to embark on their "Going All Thrashy Again Was A Bad Career Move" World Tour 2004 to promote their new album "Yes, It Has Got A Black Cover Again But There Are A Few Ballads On It Honestly".
Their latest single "Nothing Else Still Matters" reached number 98 of the US top 100 before finally giving up trying and going home.
Gentoo Linux - another day, another USE flag.
Here's Entrepreneurship 101: The successful entrepreneur turns a Risky Venture into a Cash Cow. She then sells the Cash Cow, when it has matured, to the professional manager. And starts a new Risky Venture. The difference between enterpreneurs (whom the /.ers envy) and professional managers (whom they scorn) is called management style.
Most entrepreneurs have neither the patience nor the inclination to manage a mature company. Those who recognize this in themselves move on to bigger and better things.
Examples of entrepreneurs: Steve Jobs, Michael Robertson, Wayne Huizenga.
a small company however many ways you look at it
I don't see a Fortune 500 (#236 I believe) as a small company in any way at all... how do you consider Apple Computer "small"?
Apple is not spending their (now over $4.5bn) cash on the music business. THe iTMS is turning a (and I quote from the latest financial call) "a small profit".
This is a service that was intended to just about break even, with the view to selling more iPods. So far, this service can only be called an unmitigated success in itself, and looking at the over $1bn of revenue that will come from the iPod in this year alone, the entire music division is doing incredibly.
BOOM napster sneaks in with the same products and services but just a little cheaper and suddenly Apple goes chapter 11
This is just ridiculous, maybe "sneak in with same products" is the best the Roxio management can come up with in place of a proper business plan, but no matter how many times you say "BOOM" it doesn't make it happen. You neglect to explain HOW on EARTH little Roxio/Napster can "sneak in" with the "same products" when Apple is a multi-billion dollar consumer product company and you can bet your granny that there are hoardes of extremely bright people over in Cupertino working on versions of the iPod that would make the current ones look like a 1980's walkman. What resources does Roxio/Napster have to compete with the resources that Apple both has and is willing to throw at this market?
Plus there's the headstart factor, every day that goes by Apple cements itself into the lead, evey million songs that are sold is another million songs that will be played through Apple's iTunes software or Apple's iPod player cement cement cement goes Apple's foundation bulding machine. And on top of this no other service comes close to the integration and quality of the whole music service from Apple.
So please, explain a little more about how Roxio/Napster, which has just become a totally profitless organisation is going to ensure that "suddenly Apple goes chapter 11"
Sheesh.
This sig has been deprecated.
Apple claims that iTMS is breaking even now, or even doing better than breaking even, if not by much. Meanwhile it's helping them sell a kajillion ipods and mini ipods. (I refuse to call them ipod minis, that's not how the english language works. If I were speaking espanol, I'd use their name.)
As such apple might end up getting shut out of the business and selling iTMS to someone who will contract them to maintain iPod integration or something, but other than that I don't see iTMS hurting apple in the future.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Who wants to take a guess as to when Roxio aka Napster will be making an appearance as an official fucked company?
Bad analogies are like waxing a monkey with a rainbow.
Some may not agree with this, but it seems to me a somewhat foresighted decision to sell their burning software division, as disk-burning is rapidly being incorporated into free venues, such as online music store software, winamp, etc.. Not to mention windows xp's disk-burning incorporated into the OS. I don't use it, but the masses do whatever happens when they pop in the blank disk. I can't imagine OEM's continuing to pay roxio to include their software either when they will have so many free alternatives, and I won't be surprised if the music stores take a proactive approach to getting their software included with cd burners. (If it isn't already, haven't bought one in a while)
Or, they could drop Napster, integrate Easy CD and Toast more tightly with iTunes and tap into the marginally profitable on-line music business with a highly profitable tie-in. You know, kind of following the business model of the company that is the market leader.
You can tell a great deal about the character of a man by observing those who hate him.
Roxio used to be a subsidiary of Adaptec.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Selling iceboxes to eskimos is easy if you know anything about marketing. It's all in the positioning. Instead of iceboxes, you have to call them "bear-proof meat lockers".
I don't know the numbers, but it all might make sense. Say that they might make a total profit of 80 million on their CD stuff after about 20 more years. My guess is that just about all computers ship with burners stuff already. So they cash out today and make enough money to retire, but they don't. They would get bored. So, they decide to try something new and exciting. They might even get to hang out with rock stars. Oh, what about the guy who just started in the code room and won't get rich? He obviously didn't get to take part in the decision. Everyone doesn't want to be Bill Gates, though most might like to try it for a little while.
I thought it had to be April Fools Day when I read the post, which to me sounded a bit like "Microsoft sells Office, Windows and Linux Bashing divisions to Apple, concentrates on PocketPC, TabletPC and FrontPage Express licensing."
But on second thought, maybe this makes sense. Writing CDs and DVDs used to be slow and cumbersome. The operating systems didn't support it, so Roxio and other software filled a niche. These days more and more people own computers that can burn natively. The market for this software is likely to shrink, or at the very least become commoditized. Watch Longhorn get iTunes-like music burning support. The Easy CD Creator market is doomed, and perhaps Roxio decided that their best bet for growth is to copy Apple.
Oh please. Get real. ipod mini is it's name. They can call it what ever they want. Do you also type out "Toys Are Us"
its
I stuck a blank DVD-R in my machine and I believe XP SP2 offered to let me write it. I don't believe I saw that before SP2.
In order to maintain the income that the CD-Burning unit provided you would only have to make 7.5% off the $80M. I'd propose that there many less risky ways to see 7.5% off $80M then trying to maintaining the profitability of 2nd rate CD-Burning software. I don't think Roxio products will ever see another $80M in profit. I'd question whoever was willing to pay $80M for a company that only makes $6M profit / year. As for focusing on Napster, it's a recognized brand and the online music market is big now and is growing.
As if we haven't seen enough :)
eBay is to Yahoo Auctions
as
iTunes is to Napster
First-Past-The-Post wins... And conversely market share wins.
Ebay wins because it's the best place to go to get market value for your product. If you want to sell something, your best chance is eBay. More bidders = more sellers = even more bidders = even more sellers, etc etc...
iTunes wins because it has the most consumers for the record labels. It has the purchasing power over the record labels, not Napster. iTunes can get the record companies to drool over their market share.
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
The Roxio booth was giving out packs of Jelly Bellys. The flavors? Buttered toast and jam.
Do you not realize that they no longer own their software division?
This is when a (-1: Dumbass) moderation is required...
Does this mean that I will be able to get Direct CD at the same time as I get my Hot-Dog with Chili and Fries?
Alcohol 120%, which should be in everybody's toolbox by this point.
* Sell off the unprofitable unit and let it die.
Or, get the hell out of the way and let those won't-go-away lawsuits grab what is left of the "company"...? The article said that the original investors were still being sued. Let the plaintiffs take the near-dead carcass of the buisiness. I'm not usually very insightful, but this looks like a calculated legal defense move to me, with a hint of that "Hail Mary pass - It Could Work" angle too.
Admittedly, those of us using CD-ROMs to make backups, beta product CDs, boot disks for embedded machines, and prepress separations are outnumbered by the zillions of kiddies pirating music.
...is there was a nasty legal battle between Gracenote (nee' CDDB) and Roxio (a spinoff of Adaptec). Gracenote sued Roxio for infringing on their patents involving CD identification. Roxio's Easy CD Creator used a different lookup database but it was claimed the patent was still violated.
If you want to read up on it, Google for GraceNote and Roxio. About a month after the inital suit was filed, Roxio countersued (standard procedure - it beats rolling over). Later, there was a long-term license agreement but rumor has it Roxio did not come out on the long run.
Add to the fact that since they've already gotten a couple high profile schools on board, more are sure to follow. I see Napster as being profitable in the VERY near future, so perhaps this isn't as dumb a move as everybody thinks.
Buy Steampunk Clothing Online!
Now this is the stupidest move any company can make. I don't know about Easy CD Creator but Toast Titanium is an outstanding product.
What is Roxio thinking? Do they think they are going to have a better chance competing against Apple because the name Napster?
They should stay the way they are.
I think most of the negative posters get this full well. We just happen to believe that the odds of Napster becoming even modestly profitable are somewhere between slim and none. $80 million is a drop in the bucket to much of their already established competition. Right now even the winners are at best just scraping by.
Vote Quimby.
RTA, it says so right in it. I don't have it up on screen to cut and paste, but yes they will be retaining the Roxio name, and "most of" the employees.
"Champagne for my real friends - and real pain for my sham friends!" http://ericblade.postalboard.com/
Had to look at my watch to make sure it's not April 1st. Or is it at Roxio
A dozen question marks, four numbers, four parentheses, one ellipsis, and an exclamation point. Mathematically, such a joke really shouldn't have been that funny.
--LordPixie
I thought that Apple has their online music business mainly to sell the iPods. They barely break even on the iTunes, but earn a healthy margin on the additional iPods they sell.
Is Roxio planning to sell their own players? Otherwise their strategy doesn't make sense to me.
The writing was on the wall, along time ago.
Nero came out with a nicer and more functional product. Adaptec knew this was coming, and made the $$$ when the timing was right. Roxio thought a revamped GUI' and a bunch of unusable clutter, was what the consumer wanted and was wrong. Now the Chicken has come home to roost, and it has lain a big, old fat, egg... Adaptec had a good product @ EZCD v5 and from that point on, it was and still is crap. Nero added mpeg encoding, dvd utilities, audio burning and packet cd writing when EZCD was going through thier company change. Also o top it off they (ahead.de) made it simple to use...NERO didn't break windows operability in the process either. WindowsXP native drag and drop burning is a farce, and it only takes on use of NERO to discover that.
I don't know if Nero makes a version for Apple Products, but I do know Nero is OEM Bundled, with just about every Burner I have purchased, and my friends as well. It's a shame that Roxio is hanging it's finacial Hopes, on the Napster Nail, and I am sure the Next thing we will be hearing is how they are a failing company and get sucked up by Symantec, or some other gobbling, IP Grabbing Pirahna left from the Bubble Popping.
My cat's picked up a Hammer. HEY! Put down that Hammer. Put Down that Hamm...THUNK!
Mad MBA: "Igor! Throw the switch!"
Igor: "Yes, Master!" (loud bang with lots of sparks and crackling sounds)
Mad MBA: (gleefully) "Yes! It lives! Franken-Napster lives!"
Igor: "Master, what about the profitable division?"
Mad MBA: "Get rid of it! Sell it! We need to money to feed my beautiful creation!"
Igor: "Yes, Master" (and quiety mutters: "Crazy dumbass")
But Roxio claims that they will make it up on volume. Just like all the other dot-gones did.
I've read all 150+ comments on here so far, and have yet to see one thing noted:
Part of the deal is they get a crap-load of stock in SonicBlue.
SonicBlue has hardware/software out there in virtually every thing that reads/writes CDs/DVDs, as far as embedded systems go (like your home CD-Recorder or DVD-Recorder, and players, and such).
Someone should google around for SonicBlue's profits, and see what type of a good thing it's going to be for them to still be making money off the stock part of SonicBlue, WHILE using this mega cash infusion to put some work into securing hopefully good stuff on the Napster side of things.
"Champagne for my real friends - and real pain for my sham friends!" http://ericblade.postalboard.com/
I never understood how Roxio could on one hand sell music riddled with DRM and on the other hand sell music burning software.
I can only hope that Nero never decides to sell music!
If someone says he and his monkey have nothing to hide, they almost certainly do.
why hasnt that hasbeeen overdosed on heroin or crack or whatever is hip with "musicians" yet?
Just because a business shows a loss on the income statement does not mean it is a BAD business. The Napster part could very well be CASH-FLOW positive which is a GOOD THING. Plus they may get to keep any tax savings from the Roxio losses to carry forward to offset income in future years meaning NO TAXES for many years. Also, I suspect overhead will be lower in the on-line music business than in the software business, thus leaving a bit more margin to play with. The Napster name is well know so marketing does not have to be intensive, saving more money. The lawsuit threats over copying software are now someone else headaches. This idea might just work, it's better than waiting around till there was nothing left to salvage after a lawsuit was kicked off against a product. This is a pre-emptive idea, and really not that bad of a risk. With $80M (assuming they don't blow it dot com style) they should last a while and maybe make a go of it. Like they say.."no risk = no reward".
So you've got two parts to a company, one is profitable, the other in a hot area with lots of better establish comptetition that is loosing money. What to do?
This sounds like a joke. Or a bunch of execs taking the money and running and leaving a ruined mess behind.
If they wanted to compete, they'd follow the microsoft model and build the burning software business up to a point where it can sustain lots of losses while they poor money into the music store. Like ms with the OS and Office and anything else they do.
If I was a stockholder I'd be either running and running fast, or considering a lawsuit of the execs that just made this decision (assuming they don't hold most if not all the stock).
- Napster can cement itself as the #2 online music store
- Napster can use all that new capital to build innovative, cheap MP3 players. Maybe a 10 GB player for $150?
- Napster can ride Microsoft's coattails and their super cheap player to surpass Apple
- CD burning software fades away as a commodity. Most burning is done by media player programs, like the Napster/Windows Media Player. Data/image burning is handled by Windows.
If all/most of these things happen, then Napster will look pretty strong. I actually think that #1 is likely to happen because of their college ploy. I think #4 also has a good chance, too.Does a company name have to get reused in a failing situation befoer they realize that it's not going to %^%^*@ work??? There was a time and place for pay on-line music and it would have worked. However the RIAA had to stick it's nose into everythign and then try to sue every 9 year old and 68 year old it could fine and blew that chance right out of the water.
Napter is dead, let it die folks. The name now has more of a humorus meaning then anything. When there are jokes about it in a Marky-Mark movie, it's time to think of a batter name (the Italian Job was a decent movie though).
I still pay for my music, but now I download what I want to check out, buy it if I like it and wipe my HD clean every few weeks just in case those retards figure I'm not caughing up enough cash for them. If it's crap music, I don't want it, if I don't like it I don't want it and I won't keep it. Why I buy it, it's mine, and back the hell off.
Trying to be different, just like everyone else.
Fry: Cool! So there's an infinite number of parallel universes?
Professor Farnsworth: No, just the two.
This article is exactly what's wrong with today's media. Instead of simply telling the facts as they are, the reporters try to make themselves a little more interesting than the competition and embed their own opinion in the story. So its only natural for 90% of the potss on this page to be blasting Roxio for this very "stupid" move (after all why WOULD you sell your profitable division to focus on the one that's losing money ?!! That just doesn't make sense !). On top of this, this reporter isn't even backing up his claims. Since when has online digital music service been a "money-losing" business ? I bet you the guys at Apple wouldn't agree with this... Bottom line is I'm sure the people at Roxio have a valid reason for doing what they did. And without looking in detail at the company's financial records and their history (a succesfull business model in the past doesn't mean it will stay that way) we should just refrain from commenting on Roxio's decision and stay clear of these articles that try to pass themselves as news.
A million monkeys and this is the best sig they could come up with...
Yes, because we all know that, historically, whenever Apple has created a dominantly superior product they have always managed to keep their market lead.
cough--Mac--cough--Newtown--cough--iPod
The online music industry is just in its infancy. With several other recognizable names including MTV looking to drop into this scene in the next year, the market may swing as fast as it started.
Roxio is also purchasing the website fsckedcompany.com for an undisclosed amount. Investors are in trance.
The worth of the company is always subjective.
The company may be worth $80 million to the purchaser.
But to the current owners it should be worth less, even if part of that value is the freedom to not have to maintain it.
As long as they arent planning to lose 80 million in online music they did ok....but... They seemed to have lost over 8 mil on it last quarter so they have 2-1/2 years to turn around Napster which losing more money than it takes in. Spending 16 million to sell 8 million in music is a business plan ?!? They already have the name recognition and they have the music (well, close anyway) so what are they missing that they can fix? So depending on how much money the bigwigs take and run Napster and its annoying college scams should be gone soon. Yes? No?
Buying up a respected company so you can use it's name, deceiving your investors, and then pumping and dumping your stock while suing your customers.
I stopped using Roxio/Adaptec/whatever it is now called after their version 4.x of easy cd creator. Version 5 was buggy like crap and would freeze and die all the time. Version 6 onwards was so bloated and full of eye candy that it was difficult to get it to do something I need. I sold my soul to nero and never looked back. Nero is stable, functional and power packed, without bloat and ugly eye candy like roxio. Guess all the good software engineers left roxio.
This one's easy... MBA 101..
Here is how you make profit from this:
Just you need to look at it the right way (this is serious)!
What is important is NOT the financial health of the company, which will go bankrupt in 5 years (even the management knows this... but thats not what's important).
Rather, they now have 80M in cash...
Guess what that means!
Massive exec salary and bonus time! (until you go through the 80M).
Put a big hunk of the money in management salary trusts (happens all the time..that way the stockholders/creditors cannot get it when the company goes bust), and management gets rich.
In 5 years, company goes bust, fire all the employees.
Management takes $30M or $40M of it in 'exec compensation' over the 5 years... Retire in the Caymen Islands.
Fuck the company... fuck the employees... who cares..we got rich!
Happens all the time these days.. the new american way.
(I kid you not..in 5 years, when we read the story on Roxio/Napster this is exactly how it will have played out...)
YHBT.
HAND.
RIAA thug: You will drop the CD-piracy division before you ever sell a single song.
Not that this wasn't entirely predictable.