Is the 'new' Napster on the verge of going down the tubes? Again?

Despite massive support from the Big Four record labels, which shoe-horned it into universities across America, and non-stop hype from mainstream media, the disinterred version of the application that launched p2p file sharing has been a dud since day one.

The original indie app was buried by the Big Four, eventually returning in castrated form under Roxio, now trading as Napster.

Since then, Napster has had constant injections of working [read survival] capital, high-priced promotion using every PR trick in the book, a switch from straight sales (flop) to music rentals (flop), product launches in Europe, and continued backing from the music cartel.

In its most recent effort to convince the world (and its investors) it's viable, Napster says it now has more than 500,000 subscribers paying for downloans.

Notwithstanding, "The development follows reports of impending layoffs, and a possible fire sale or liquidation ahead," reports Digital Music News, going on:

"Sources to Digital Music News first made the claims over the weekend. Those reports have been denied by Napster, though continued quarterly losses and Apple’s dominance in the paid download market remain serious concerns."

Digital Music News says for the fiscal second quarter, Napster posted net losses of $13.6 million.

"Previously, losses hit a record $19.9 million, though revenues have continued to climb in 2005." Meanwhile, "Gorog pointed to a healthy '$100 million on our balance sheet' in comments Wednesday, though a classic cash burn scenario could be underway," says the story.

Napster will provide additional details on its operations and performance during its third quarter earnings call next month, says Napster.

Meanwhile, history is repeating itself.

Corporate version or not, Napster is again being sued for copyright violation, this time by Nashville's MCS Music America.

Also See:
paying for downloans - Napster Passes Half Million Subscriber Milestone, January 18, 2006
Digital Music News - Napster Crosses 500,000 Subscribers, January 16, 2006
again being sued - Napster sued: copyright case, December 22, 2005