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Napster: upward music sales

Napster is having success with its digital music store. CEO Chris Gorog announced the good results in online music sales in a statement released late last night. "Since the launch of Napster To Go," said the CEO, "we are experiencing an exceptional demand for every aspect of our business."

The driving force would be, in addition to the aforementioned music rental service, the popularity of some players like those of iriver, Creative and Dell. Thanks to this, the service would have added many annual subscribers and sold out the players offered as a tribute to those who signed 12 months of service

The statements were followed by the facts, represented by an increase in revenue forecasts for the quarter, raised from 14 to 15 million dollars and officially communicated to investors.

The stock market caught the announcement in an almost enthusiastic manner by raising NAPS shares by almost 10%, which at the end of the day closed with a more modest, but still not contemptible, + 6.91% and almost quadruple exchanges compared to the average daily. At the same time, investors punished the Apple stock which, due to the announcement of Napster, fell by 5.28%, believing that an optimistic outlook on Napster must necessarily match a less favorable look at Apple's online music sales business .

In fact, many analysts have recorded the stock market's reaction simply as proof of the extreme volatility of investments in digital music. Taking a look at the numbers, in fact, it is difficult to justify a reaction like yesterday's.

Not only is Napster's turnover increase expected to be very modest, but Apple continues not to decline but to increase its online music sales and increase its competitive advantage. The observers, in particular, point the index to the probable 85 million tracks that Apple will have sold by the end of the quarter that compared to represent in turn a turnover of 85 million dollars, five times that of Napster. The company of Chris Gorog, moreover, committed (and will still be for a long time) in a costly campaign to support its business that will lead it to spend 30 million dollars, or twice as much, as forecasted by the current year , should be able to invoice during the current quarter.

"Napster" said Paul-Jon McNealy of American Technology Research "could also have some success thanks to the advertising campaign it is supporting, also because those who subscribe to a year of service get a free month, but we remain cautious in perspective. During the next quarter, the arrival of new competitors