The reincarnated subscription music service Napster isn't exactly the powerhouse it was as the pioneer of peer-to-peer file swapping, CBS Marketwatch reported Feb. 19 – as in, millions in losses, shakeups in the penthouse, and coming job layoffs.
Chief executive officer Chris Gorog told the San Jose Mercury News the paper was "after something I don't think is there," but the paper noted Napster's president, chief financial officer, vice president of programming, and head of corporate communications have left the company, which Roxio resurrected as a legitimate subscription music service last year.
A company spokeswoman who wasn't identified told the paper Napster was only "eliminating redundancies in the organization," without specifying how many jobs would be cut.
But Marketwatch said the online music business, in terms of subscription or pay-to-play services, is proving a lot more tough than Napster thought it would be. "Profit margins are slim," Marketwatch said. "Napster appears to be the fourth largest music service with an estimated 90,000 subscribers." And the Mercury News said Napster accounts for only 25 percent of the tracks sold through Apple's iTunes Music Store.
