Roxio stock falls as CFO quits
Napster-owner Roxio’s share value declined on trading yesterday as Wall Street considered the resignation of the company’s chief financial officer Elliot Carpenter.
Analysts trimmed their expectation for the firm in response. The news emerges as the company enters a period of restructuring around the launch of its Napster 2.0 online music download service.
Early expectations for this service have been tempered by news of Microsoft launching its own service next year, the imminent debut of other major names, including US retailer Wal-Mart and the continued market dominance of Apple’s iTunes Music Store.
Roxio has appointed its current VP strategic planning, mergers and acquisitions, Nand Gangwani, to Carpenter’s former position. Gangwani led the move to deliver an online music business.
Roxio Chairman and CEO, Chris Gorog, said: “Nand has been a key member of Roxio’s senior management team and has proven himself as a very accomplished financial manager and a strong strategic collaborator.”
Carpenter said: “After more than eight years with the Roxio business, I have chosen to spend some extended time off with my family. I will miss the opportunity to continue to grow with this innovative company and to work with this top-notch team. Over the coming weeks, Nand and I will be working together closely to ensure a seamless transition.”
Advertising Age reports that despite the setback, Roxio has begun its aggressive marketing campaign to stimulate online music sales. It has launched a $20 million ads campaign in the US, starring its Kitty logo as a cartoon character.
The animated series of ads “reprise the history of the outlaw file sharing service that triggered a revolution in the way music products are consumed and marketed,” the title reports.
Scott Steinberg, Roxio’s vice president for strategic marketing, told Advertising Age: “The idea behind the series was to help us showcase and develop the character behind the brand. The Napster Kitty equals digital music.”
The digital music industry continues to gather steam. Official US charts compiler Nielsen SoundScan yesterday added four online music stores to its tracking service. These include Napster, BuyMusic and Musicmatch, with MusicNow scheduled to begin reporting data “shortly”, the chart compiler said.
Nielsen SoundScan already evaluates sales through iTunes Music Store, Rhapsody, MusicNet and Liquid Digital.
Roxio closed at $5.57 per share last night.