"I think he feels like people don't take him seriously," a friend tells Page Six Magazine about Facebook billionaire Sean Parker. "People often think of him as being like the character…in the movie [The Social Network]." I wonder why! Possibly it's the expensive, drug-fueled parties. Or maybe it's the way he holds paranoid grudges over nightclub slights?
After Valleywag reported that Napster creator Shawn Fanning may have found a new love, he issued a snappy response on Facebook. Points to Fanning for his innovative use of social-networking technology — think Sean Parker, Fanning's cofounder at Napster and Facebook's ex-president, gave him pointers? But we'd have hoped for a cleverer comeback.
Over the years, the reports of Napster's death have been greatly exaggerated. But electronics retailer Best Buy may just manage to put a stake in its heart. Best Buy is buying the online music-subscription service for $121 million — $54 million, really, after setting aside the cash in Napster's bank account. A great return on investment, considering Napster's assets last sold for $5 million out of bankruptcy in 2002, right?Wrong. Roxio, a CD-burning software company, snapped up the Napster name and the technical assets of Shawn Fanning's file-sharing startup on the cheap. But sometimes you get what you pay for. Roxio shed its software business and took the Napster name, but never figured out how to profit from it. In the last year, it lost $16.5 million. And yet Napster managed to live on. If anyone can lay it in the ground once and for all, we're betting it's Best Buy. The retailer has stumbled from one unsuccessful online-music strategy to another, most recently through a partnership with RealNetworks' also-ran music site, Rhapsody. Why doesn't Best Buy just ask Steve Jobs for more iPods to sell? That seems easier.
Napster — or rather, the pathetic music store which picked up the famous file-sharing service's brand — reported a drop in quarterly revenues to $30.3 million, despite the launch of an MP3 store. Subscribers fell from 760,000 to 708,000 in a quarter's time. Here's Napster's latest commercial, obviously not effective at drumming up business. [PaidContent]
Napster is still trying to prove that it can sell MP3s, but for some Napster shareholders fighting a proxy battle to get representation on the board, they'd prefer the company was for sale, and at a premium price. Based on their SEC filing, shareholders are arguing that with the purchase of Last.fm by CBS for $280 million, Napster should be worth equally as much, if not more. The only reason it's not is because of a "lack of confidence in governance." They seem to be overlooking the fact that Last.fm doesn't have the brand name baggage but does have a lively community of users.
The celestial jukebox is back, far too late to matter. Napster is now selling a library of 6 million songs, from all four major labels, as MP3 files, a format which lacks copy protection and hence is compatible with any number of devices — most importantly, the iPod. In other words, the state of affairs that existed nine years ago at Napster's original launch, save for the 99-cent fee now charged per download. Egghead Netscape cofounder Marc Andreessen notes the irony without explanation. For the slightly less brilliant among us, here it is: The record labels, having killed Napster once, have now rallied behind it, hoping to weaken Apple, a company whose iTunes store is already the dominant music retailer in the U.S.
Sean Parker has had a hand in some of the Valley's biggest successes. His first company, Napster, took the world by storm, but didn't make Parker rich. His second, Plaxo, just sold to Comcast. And his third, Facebook — well, say no more. Except for the bit about him getting kicked out, according to Mark Zuckerberg's legal testimony, for a cocaine arrest. (Parker characterized the incident as "a misunderstanding.") That and more is covered in the 21 pages Sarah Lacy devotes to Parker in Once You're Lucky, Twice You're Good, new book about Web 2.0. The index page where Parker is listed:
For his second act, Napster founder Shawn Fanning founded a startup, Snocap, which utterly failed to change the music business. After he left, its remnants were sold to Imeem. For his third, Fanning joined Volkswagen's new ad campaign. My favorite part about Fanning's commercial, below? Count how many times Fanning or the bug says the word "Napster." Got to love lawyers.
According to Silicon Alley Insider, Yahoo may be looking to sell its music subscription service. The move makes sense: Ian Rogers, the general manager of Yahoo Music, declared in October that he was done inconveniencing users with the digital restrictions labels required for online music subscriptions. Subscriptions simply haven't materialized as the profitable business model for artists, labels, and services alike that many had imagined. Freeing itself of the failed model will allow Yahoo to focus on free, ad-supported music. The only problem now is dumping the old service.
Wired music writer Eliot Van Buskirk decided to cancel his online subscriptions. His anti-DRM talk made me sleepy, but what woke me up was the ludicrous amount of time Van Buskirk spent on the phone with Napster and Rhapsody. No doubt many subscribers hang up after half an hour and let the charges accumulate. The real moneymaker for these companies may not be DRM, but CRM.