Napster Tries Half-Price Summer Sale To Move Numbers

Memo to self: When Napster's ( NSDQ: NAPS) Q308 subscription numbers are released, remember the mid-August sale promotion offering 6 months for $70 instead of the usual $127?a discount of more than 45 percent?complete with 50 downloads of MP3s that can be kept. It's the kind of offer that can raise cash and boost numbers for a few months but can it move the needle more than briefly?

Just last week, Napster reported a subscriber drop for Q2 to 708,000 from 760,000 paid subscribers in Q1. Its 10-Q described the release pretty succinctly: "This decrease occurred because new added subscribers were not sufficient to offset our normal cancellations during the period." Yes, that's usually how it works. While promos like this may bring in some new subs who stick around (some because they forget to cancel), it's also likely to appeal to bargain hunters and transients.

The company is under pressure to quickly goose the business. It faces a long-shot board campaign from a trio of activists, which is indicative of investor frustration. Although that's likely to fail, the company is trading near its cash levels, meaning it could be swallowed up by anyone, pretty easily.

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