Napster Subscriber Base Grows Significantly

    April 5, 2005

Napster’s subscriber base grew by 143,000 in the fourth quarter, raising Napster’s subscriber base to a total of over 410,000, including 56,000 university subscribers.

This represents a sequential quarterly increase in subscribers of over 53% percent and continues Napster’s rapid growth rate of its subscriber base and its pioneering Napster To Go portable subscription service, the first of its kind in the world. Based on strong subscriber uptake and stronger than anticipated sales of downloads to subscribers, Napster is raising its fourth quarter revenue estimate to between $16.5 and $17.5 million.

“We believe Napster continues to be the fastest growing music subscription service in the industry and we are very pleased with the excitement demonstrated by consumers and the press over Napster To Go,” said Chris Gorog, Napster’s chairman and CEO. “Our innovative Napster To Go marketing campaign has lead to a very strong increase in consumer awareness as music fans are ‘doing the math’ and discovering the incredible value and excitement of a Napster subscription. We were also delighted to see that our new Napster To Go subscribers exhibited a strong appetite for purchasing pay-per-download music as well and are therefore raising our sales guidance for the quarter.”

In the weeks since its launch, Napster To Go has received significant critical acclaim in leading business and consumer media outlets including the Associated Press, CNET, The New York Times, The San Jose Mercury News and USA Today and was recently named Editors Choice and Product of the Month by PC Magazine. In addition, prominent industry analysts have shown keen support of Napster’s digital music subscription model.

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