Crenk

Napster has hinted that the company is up for sale again, saying in its response to a dissident shareholder group that the company is once again exploring possible strategic alternatives, and has retained UBS Investment Bank to assist in the process. The company hired UBS two years ago to explore a possible sale, but no deal emerged. Napster informed shareholders of the move in a letter that also said the company believes that three proposed dissident board candidates are “unqualified.”

The company said the dissident candidates “have offered no specific business plan, other than suggesting a vague review of Napster’s business,” and also “have no significant ownership in Napster and, in fact, have been frequent sellers of Napster stock.”

Napster instead urged shareholders to re-elect its current slate of independent directors.

I predicted something like this happening to Napster back in December of last year. Napster has a business model that was rapidly decreasing and they didn’t even look like changing it. The company has a great brand, but they are still just moving in the wrong direction. A download store was never going to be right for this brand, they should have done something ad supported and in the same market as Imeem, build a community around this great brand. I so wish I had control of this brand!

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A couple of weeks ago Spiral Frog claimed that they were the third largest legal music download store, now they are reporting some very interesting news. SpiralFrog has announced a licensing agreement with RoyaltyShare to add its independent label customers to the free ad supported service.  Indie label MPress has also been added to the SpiralFrog catalog which now tops 1 million tracks.

Napster have announced that they are dumping their desktop client and re-launching with a new web-based version. Napster customers will now be able to listen to their music from any computer anywhere in the world. This will hopefully enable Napster to also develop embeddable widgets that can push their products on possible web enabled devices.

Napster is still going to be based as a subscription model, which most industry experts think is holding back the company, because it makes Napster incompatible with the iPod. Consequently Napster has lagged behind Apple’s end to end iTunes system which reportedly controls 70% of the digital music market.

UMG has announced they are now happy with iTunes and the revenue split, so it is only a matter of time before DRM free becomes standard and Napster will really need to gain some market share before Apple.

If you would like to see a slideshow of the new Napster service, please head over to Crave.

RouteNote has just signed a deal to provide our content on Audio Lunchbox. Audio Lunchbox will sell our content on their sites and services for the next three years. Audio Lunchbox has a licensed catalog of over 2 million songs in 79 sub-genres. Audio Lunchbox is the only service on the web to offer both a la carte and permanent subscription downloads side by side. Well thats what they claim.