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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?
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.
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!
April 1st isn't for another 9 months.
Board Member #3: ??????
Board Member #4: "Profit!"
Roxio commits corporate suicide. Film at 11...
First there was the dot.com bubble... then it burst...
now corporations are intent on seeing that movement continue. Watch for the new dot.com suck. First SCO making a side business of OS production and concentrating on making their own customers hate them, now Roxio going for an even bigger/quicker dive.
Next up, watch Dell decide to sell off their computer production business and go into making bathmats. or something.
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...
Read the fuckin' summary. The CD/DVD burning division -- which makes DirectCD and the AWESOME toast application -- is profitable. Meaning, it makes profit.
Roxio is SELLING the profitable part of their business to concentrate on the stuff that's not working.
Why? Because they're dumb.
Hey freaks: now you're ju
...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
Roxio commits corporate suicide. Film at 11...
Nah, they are actually very shrewd and forward-looking. They know that if not now, then eventually something like the INDUCE act will be made law, effectively making illegal CD & DVD burners as well as Roxio's (formerly Adaptec's) popular duping software.
They're just gittin out while the gittin is good, see?
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.
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.
What I want to know is whether Sonic was smart enough to grab the "Roxio" brand name along with the software?
[ReidNews]
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.
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 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.
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.
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