Napster Subscriptions Up; Company Raises Revenue Estimates

| Reports

Napsteris subscriber service soared 53% during the companyis fourth fiscal quarter. Napster announced Tuesday that its subscriber base grew to 410,000, up some 143,000 users. The company also raised its fourth quarter revenue estimate to between US$16.5 million and $17.5 million, though it did not release earnings estimates.

Napster has had a difficult time competing with Apple Computeris iTunes Music Store in the area of selling songs, but has demonstarted increasing success with its music rental business, a service Apple does not currently offer. Subscribing to Napster allows one to download as many songs as one wants, as long as you pay a monthly subscription fee.

Until recently, however, users couldnit take their rented music with them on portable music players. Napster introduced Napster To Go in late 2004, which allows its subscribers to take their music with them on Windows Media music players that support the technology. Since that time, Napster has seen fast growth in its subscriber business.

"We believe Napster continues to be the fastest growing music subscription service in the industry, and we are very pleased with the excitement demonstrated by consumers and the press over Napster To Go," Napster chairman and CEO Chris Gorog said in a statement.

Napster shares jumped more than 17% in morning trading, but have since backed off to a 10% gain, to trade in the $6.80 range. Apple shares also showed a gain of 2.31% through early afternoon trading.

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