Blog Post

Desperate Napster Calls Competitors Desperate

It’s hard not to feel bad about Napster’s situation today…they’ve certainly been shocked out of their minds, and so has the Street, and a lot of it was reflected in the Q1 earnings call today (the earnings here), with CEO Chris Gorog lashing out at Yahoo for introducing the low priced service…he used the word “desperate” about 4-5 times, referring indirectly and directly to Yahoo. And this has to be bordering on delusion: he thinks that “Napster” is not just the most well known online music brand in the world, but arguably the most well known music brand in the world

He thinks there has been a “significant overreaction in the market to the arrival of a new discount player in our space…we can compete and outperform very substantial competitors like Wal_Mart, MSN and Sony..”

He also talked about how he think Yahoo will increase the prices in the next couple of months…he said Yahoo has not been honest with the launch: he said it was an ad-supported model, subsidizing the low cost of the service with ads in the service, and he thinks it is an unproven and an unpalatable model…

Gorog thinks that $170 million of cash on Napster’s balance sheet will help them ride through whatever short-term pricing and competitive pressures there may be…

() Well, decide for yourself: listen to the audio clip from the Q1 conference call, here (5 mins, 0.8 MB)…