Napster: Microsoft's To Blame For Our Failure Against Apple (NAPS)

Reuters reports Napster CEO Chris Gorog pointing the finger elsewhere to explain his company's difficulties:

Technical glitches by Microsoft and the digital music device makers have hampered Napster Inc.'s (NAPS) ability to close the gap with Apple's iTunes, the dominant online music service, Napster's chief executive said on Tuesday.

"There is no question that their execution has been less than brilliant over the last 12 months," Napster Chairman and Chief Executive Chris Gorog said at the Reuters Global Technology, Media and Telecoms Summit in New York.

"Our business does rely on Microsoft's digital rights management software and our business model also relies on Microsoft's ecosystem of device manufacturers... It's a lot more complex to get organized properly than it is to build one device and one service as Apple has done. It's always been painful at the introduction of new technologies...

"We have not been as successful as we might in articulating the real value of this business," he said. Napster's market capitalization is about $160 million, but it has cash assets of about $112 million, leaving it with a relatively small enterprise value.

Perhaps Napster's real problems have been:

1) A business model so completely dependent on the execution of another company -- which has many other balls in the air,
2) a subscription-based, 'rent your music' model that never found favor among consumers, who prefer owning outright something they buy,
and quite possibly
3) a brand too strongly associated with free, pirated music.

NAPS 1-yr chart: