You've got to admire Napster's
Giving a year of free Napster To Go service to qualifying AT&T wireless and bundled telco accounts is a great move for both parties. AT&T will be able to set itself apart in the cutthroat telecommunications space with the value-added perk. Napster will have to forgo the $14.95 a month it typically charges Napster To Go subscribers, but the move will pay off nicely if satisfied customers stick with the service when it's time to start paying.
Napster has a history of striking distribution deals. Whether it's college campuses, XM Satellite Radio
Losses have been narrowing, but the company continues to burn its greenbacks. The company closed out 2006 with $1.87 per share in cash, its lowest level yet as a public stand-alone entity.
But Napster keeps growing, too. It closed out the year with 566,000 subscribers. It delivered 500 million downloads and another 700 million streams to users last year. With revenues growing and operating expenses expected to decline sequentially in the current quarter, Napster may finally be evolving into the promising new-economy service provider it should have been all along.
If it does, I'm sure that AT&T wouldn't mind if Napster borrowed an old jingle and reached out and touched someone.
Digital music is a high-growth industry that is often explored as part of the Rule Breakers newsletter service. XM was a former recommendation there. To see what current buy recommendations are on the table, take a free 30-day trial today.
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Longtime Fool contributor Rick Munarriz isn't a subscriber to any digital music service, even though he does have satellite radio. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.