Napster Revenue Down 18% in Q2 2020
The once infamous music-sharing platform Napster continues to operate as a legal streaming service, despite its revenue declining by around 18% in the second quarter of 2020.
Multimedia software company RealNetworks, which owns an 84% stake in Napster, revealed declining revenue from its recent Q2 2020 earnings disclosure. After generating approximately $ 28.58 million in revenue throughout the second quarter of 2019, Napster’s subscription services grossed approximately $ 23.34 million during the same period in 2020. In terms of loss of business operation, Napster recorded a deficit of $ 2.04 million in the second quarter of 2020, compared to just over $ 1.08 million in the second quarter of 2019..
Within that quarterly revenue decline, it appears Napster’s business-to-business (B2B) division has been hit the hardest, with profits falling about $ 3.37 million from the second quarter of Last year. Napster direct-to-consumer funds, for their part, were down about $ 1.88 million year-over-year. And while the report attributes Napster’s quarterly drop to “lower subscribers,” it doesn’t specify exactly how many users the platform has.
Estimate based on Napster’s quarterly direct-to-consumer revenue of $ 12.9 million, however, it appears the service has around 1.29 million to 2.59 million subscribers. Of course, the exact figure depends on the split between “unRadio” and “Premium” users, who pay $ 4.99 and $ 9.99 per month, respectively. Given this relative reach, Napster recently unveiled “Napster4Good” The program, which donates part of the subscription fee to charity, could well have a significant impact on the operations of several nonprofits.
Finally, RealNetworks revealed that he and Napster collected “proceeds from promissory notes issued in Q2 2020 pursuant to PPP. [Paycheck Protection Program] of the CARES law. Despite RealNetworks being publicly traded, it received $ 2.9 million in PPP cash, according to the earnings report, while Napster received $ 1.7 million.
A Napster representative declined to give an answer on the PPP loan.
In May, we reported on the significant controversy that accompanied LiveXLive’s obtaining a PPP loan of $ 1.9935 million. Like RealNetworks, LiveXLive is publicly traded; the company detailed its performance for the first quarter of fiscal 2020 this morning. Quarterly revenue was $ 10.5 million, with a net loss of $ 7.5 million “on GAAP [Generally Accepted Accounting Principles] based.”
Although Napster operates independently of RealNetworks, the latter’s overall financial performance, including an operating loss of nearly $ 4.99 million in the second quarter of 2020, does not appear to have impressed investors. As of this writing, shares of RealNetworks, bought and sold as RNWK, were trading at $ 1.59 per share, down more than 8.6% from the closing price of yesterday. Nonetheless, the value is nearly five times the price of 32 cents per share the stock hit amid the nationwide outbreak of the COVID-19 pandemic in March.