Napster painted a gloomy outlook for its online music service during a conference call with analysts on Wednesday.
The company said that its subscriber base had fallen over the March quarter by 7 percent as it strived to promote itâ€™s a free website alternative. The management told analysts that given the difficulty, they have not ruled out selling the company.
We do not have our heads in the sand regarding an M&A (merger and acquisition) transaction, Chief Executive Officer Chris Gorog said.
We continue to receive a lot of interest in the company. We will always carefully weigh any valuation alternative against the opportunity and risk associated with continuing as a standalone company.
Gorog also noted that a decline in subscriber growth was expected as they promote the new free website, but expects that the move should help users who expect music for free to migrate to the subscription model.
Napster loss $9.8 million the first quarter, an improvement from the $19.9 million loss recorded a year earlier. Revenue rose to $28.1 million from $21 million.
Napster was developed by a university student in 1999 to help people swap music, but it was shut down quickly after in 2001 due to copyright infringement issues. In 2003 it re-launched as a subscriber based service, after being bought by Roxio Inc.