I had a quick chat with Brad Deau, president of Napster, on parent company Roxio changing the name to Napster and company’s future…
On management changes: Not much…Chris Gorog will be the CEO of new company, I’ll remain the president and so will the CFO and general counsel…
On betting the company on one horse: The software division did not have the same growth prospects as the online music segment. There are few segments out there with as much promise as digital music. This helps us focus on digital music 100 percent and that not only helps us as a company, but also investors. They know they’re getting involved in a high-growth company in a high-growth segment with a well recognized brand..no longer do you have to get your mind around the software business as well as the digital music business.
On margins being low: We’re very early in this market…our strategy is around subscription. Not only is there a recurring revenue, it is a continuous relationship with the customer. So it is a lower customer acquisition cost than download business.
On consolidation in music market [Would Napster be an acquisition target?]: The consolidation to date has improved the efficiency of the market. We’ve acquired several companies and put together this business model. Are we attractive to many other billion dollar companies? Absolutely. The folks that are in the retailing, software, subscription, cable TV, satellite TV…the list goes on and on. We’re incredibly attractive to many folks. Our job is to operate our business to execute on our plan, and we’ll be more and more attractive to many other folks. Our plan is to deliver a very strong, independent pure-play business…
On Microsoft’s Janus DRM: For about the price of a CD, users will have the world’s largest music collection and will be able to take it anywhere.
On moving beyond music: Right now on Napster you can stream videos…and our technical infrastructure can handle not only music and music videos, but many other things. But there’s a $36 billion opportunity in music alone, and that’s the core strength of the brand and that’s where we’re currently focused.
— Reactions To Napster Deal
— Napster/Roxio’s Conference Call
— Roxio Restructures; Sells Consumer S/W Division; To Change Name To Napster