Can Sex Save Napster?

Napster, in the words of The New York Times writer Saul Hansell, “was the quintessential Internet company: it upended a huge and powerful industry without ever earning a dime itself.” He of course was referring to the old Napster, the one which let loose the genie of file trading.

The New New Napster, the music service that offers every thing from downloads to flat rate music plans is finding that its tough to live in the companies of two powerhouses – Apple’s iTunes and Real, which is now flush with Microsoft Money.

The company just upgraded its software to version 3.5, and improved the download quality to 192 kilobits per second, all in an effort to fight of the #1 and a very distant #2. Knowing how the market is, the company is taking no chances and is resorting to a very, scratch that, an extremely sexy ad campaign in UK.

Get The Whole Thing. A Britney look-alike does a semi-striptease, and the ad ends, “30 Second Previews Leave You Wanting For More?” The clear dig at iTunes?

Sarcasm aside, things are not looking too good for any company named not Apple in the digital music space. Techdirt recently noted that the subscription model is having troubles. In the recent quarter the company posted a net loss of $13.6 million, or 32 cents a share, which is much better than a net loss of $15.3 million, or 44 cents per share for the same quarter a year ago. Sales were up to $23.4 million compared with $9.3 million.