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Napster raises revenue guidance

Company says demand has been fueled by MP3 players that are compatible with Napster's "portable" music service.

Napster expects to end its fiscal fourth quarter with more revenue than it had previously forecast, the company said Thursday.

The company now predicts that revenue in the quarter ending March 31 will be around $15 million, which is $1 million higher than it had projected earlier.

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Napster said the higher guidance is the result of "robust growth" in its regular and portable music subscriptions. Napster said that demand has been fueled by compatible MP3 players from Iriver, Creative and Dell. The company also cited a recently launched ad campaign for Napster to Go, its portable service.

Napster to Go offers access to an unlimited amount of music per month for $14.99. Subscribers can play the music on compatible MP3 players, but songs can be played only as long as the person keeps paying the fee. The rental model was designed to take on market leader iTunes, from Apple Computer.

"Since the launch of Napster To Go, we have experienced exceptional demand for all aspects of our business," CEO Chris Gorog said in a release. "We are confident that interest in our portable subscription service will further increase as consumers learn that for about the price of one CD per month, they have unlimited ability to fill and refill their MP3 players with their choice of more than 1 million songs."