1. #1
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    Default Looks like Napster's cash and investments are worth more than it's core business

    This is interesting... Wonder if this development with Napster is a sign of what's to come....?

    Napster Takeover Looms as Funds See Cash Exceed Stock - http://www.bloomberg.com/apps/news?p...690&refer=news

    July 18th, 2008

    Originally Posted by Don Jeffrey on Bloomberg.com
    -- Napster Inc., the Internet music pioneer whose shares have plunged 95 percent in six years, has become takeover bait for hedge funds zeroing in on a cash hoard exceeding the company's market value. While Los Angeles-based Napster hasn't posted a profit in four years, its $69.8 million in cash and investments as of March 31 eclipses the shares' $52.1 million value.
    WOW!!! That is allot of left-over cash. Wonder who's pockets it came out of. Certainly not the venture capitalists, who I'm willing to bet cashed out of Napster a good while back.

    Originally Posted by Don Jeffrey on Bloomberg.com
    Napster may be an attractive target for a buyer like JDS Capital Management Inc., the New York hedge fund that owns digital-music retailer eMusic.com, said Ken Smith, a portfolio manager at Munder Capital Management.``The valuation's absolutely dirt cheap,'' Smith said. Referring to JDS, Smith added, ``That's the type of strategic buyer you need.'' JDS bought 1 million shares of Napster in the first quarter, according to filing.
    If I were a shareholder, either directly or via a fund who holds Napster, I'd be screaming bloody murder right now. If Napster's cash is worth more than the company, as a shareholder I would want the company liquidated ASAP before the vultures swoop in.

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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    Low fidelity files encoded with obsolete techniques that come with copy protection.

    I'm surprised they're not doing well!

    Anyone who thinks that kind of model is one that will work with the public, is one not worth buying a single share of.

    I am not surprised their business tactics are as such either.
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    I suppose this may be a little OT, but after getting hosed by eMusic just recently I'm completely done with paying for "digital" music. iTunes, E, rhapsody, napster, that new hot topic service, lala.com, amazon...whatever

    Put the record in my hands or the money is staying in my pocket!
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    Put the record in my hands or the money is staying in my pocket!
    Now for the big question -what is a physical copy of your coveted purchase worth to you? Would you pay $20 for a copy?
    What if it came with an extra like an autographed picture of the band, special packaging, etc...?
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    Keep your glossy photos and doodads or whatever and I'll gladly drop $15 on a record...ahem CD...that I like, and i do several times a year.

    Of course I end up with a few Best Buy $9.99 loss leaders every year too. Funny thing about CD's is that they work on my computer, in my car, on my iPod etc etc etc...

    I bought the new Hold Steady album just the other day and was thinking to myself how I do less and less of this (probably about the seventh or eighth disc I've purchased this year) even though I hear way more music than I used too. If my hard drive crashed tomorrow, I'd probably miss having a dozen songs at worst.
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    Wilkesin - I think that we're on the same page. I buy maybe 5 to 8 records a year. I also download maybe two dozen singles as well.

    Once a regular CD is up over $15, I typically won't buy it unless there is some spiff or something that comes along with it that twirls my beanie.

    We however, are in the minority on this. It is very much a single mentality out there right now. But - bying a physical copy of a record at a show is something different. Kids dig on that. And, you can get $20 for it if you're there signing it as they purchase it. I've seen it with my own eyes and it was beautiful.

    $20 for a record. No retailer to pay, straight into your pocket all because you're spending and extra minute with a fan and becuase you bought a sharpie. Let's see, you just upped your margin from $4 to $18.50 and, you got a kid that is going to tell 20 friends about it. Sure, he'll rip the CD and give them the songs for free but next time you play there, at least 5 of those 20 friends that Fan 0 spread your seed to are going to come out and see you, they won't buy the CD if it's just music but if it's autographed then you have a chance. Maybe they don't buy the record but they buy a bumper sticker or autographed poster. Again, way better then the $4 you'd get on the base record sale.

    It's all about connecting with fans. Can't really connect with people through napster or itunes. The only way to connect is to be in the same room. Leave Napster and iTunes for the "big acts". Let them get their 30 cents per song. I'll take $1.5 a track anyday
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    I think they pay like $25 for a standard length new CD in Japan these days.
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    What I've witnessed is not anywhere near what you're talking about Joe...

    These are older crowds that I'm talking about... and primarily the "country" genre...

    They buy TWO CD's... one autographed- to put away, and one to play. Then they buy one or two t-shirts, a tote bag, 4 beer huggies and an extra small t-shirt for each of the grandkids.

    I kid you not! The older fans seem to have the disposable income. Granted it's likely to be the fact that the briefcase gig is in a pseudo rural area and they don't get to see some of these national acts but once every 2-3 years.

    But as you said, its because the bands are smart enough to have a box of sharpies, plenty of merch and time to talk to the public and willingness to pose for photo's.

    The more willing you are to converse with your "employer" (fans) the higher the sales.

    I saw one national, who's front man was suffering with a stomach bug. He really didn't want to spend too much time with the fans after the show, but he did. The fans understood and so greatly appreciated it, they almost sold out of everything they brought. There wasn't even a complimentary CD left for the owner of the venue!
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business


    I saw one national, who's front man was suffering with a stomach bug. He really didn't want to spend too much time with the fans after the show, but he did. The fans understood and so greatly appreciated it, they almost sold out of everything they brought. There wasn't even a complimentary CD left for the owner of the venue!

    now...what are the chances of this happening when that national act is in a 360 deal?

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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    What I've witnessed is not anywhere near what you're talking about Joe...

    These are older crowds that I'm talking about... and primarily the "country" genre...

    They buy TWO CD's... one autographed- to put away, and one to play. Then they buy one or two t-shirts, a tote bag, 4 beer huggies and an extra small t-shirt for each of the grandkids.

    I kid you not! The older fans seem to have the disposable income. Granted it's likely to be the fact that the briefcase gig is in a pseudo rural area and they don't get to see some of these national acts but once every 2-3 years.
    Brings up a good point. What demographic is each band targeting? This is where the marketing degree can come in handy. You have to know your audience and what appeals to them. Obviously, a band performing to an older audience with a houshold income of between 50 and 75K is going to have to bring a different box of goodies to sell then a band playing to a a bunch of teenagers that only have an extra $12 in their pockets.
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    When you consider kids don't blink at paying $100 for a pair of sneakers, disposable income is not a serious issue. The issue is simply offering a product they want to buy.
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    Default Re: Looks like Napster's cash and investments are worth more than it's core business

    When you consider kids don't blink at paying $100 for a pair of sneakers, disposable income is not a serious issue. The issue is simply offering a product they want to buy.
    a lot of people I know in manhattan live check to check with 2 other people and are behind on rent but own an iPhone - before it was as cheap as it is now.

    people will find a way to pay for things they really want.

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