NEW YORK -- With cash losses expected to narrow in the coming year and a substantial reserve to fall back on, music portal
ArtistDirect insisted it has a fighting chance of weathering the dot-com storm that has claimed so many of its startup brethren.
Company Thursday reported a cash loss of $45.8 million for 2000, compared to $23.4 million in 1999. ArtistDirect more than doubled its revenues over the same period to $21.7 million from $10.3 million.
Cash and cash equivalents on the company's balance sheet's stood at $51.5 million at year's end, which would leave ArtistDirect with little more than a year of operating cash left if it keeps losing money at its current rate. But thanks to plans announced in January to slash expenses and regroup into five divisions, the company expects to cut its cash losses by 50%-60% this year from 2000 levels.
Losses seen shrinking
By that estimate, ArtistDirect last month said it would post a cash loss of $18 million-$20 million in 2001. During a conference call Thursday to discuss the 2000 results, company execs said they expected the losses to shrink even more over the course of the year.
"We've actually seen that, ironically, with all the market conditions as they are, it has shaken out almost every one of our competitors," said prexy and chief operating officer Keith Yokomoto. "What that has allowed us to do is hunker down and be patient."
Chief exec Marc Geiger said the company's strengthening financial position will allow it to be judicious in ramping up its planned digital music distribution businesses -- especially in the area of obtaining licenses to distribute songs from the Big Five major labels.
Patient on Web service
"Not only do we have the capital to weather the storm, but we are not running around chasing licenses from labels that don't make sense," he said. "We are waiting for the ultimate music-on-demand service, and we can see a window where that is going to come true."
Geiger said his idea of a reasonable licensing agreement would be one that allows distributors to charge consumers roughly $20 a month for all-you-can-eat download service. Exec said his team has talked with the majors about implementing such a plan.
The earnings news shielded ArtistDirect's stock somewhat against downward pressure in the broader market: Its shares were flat at 78¢ at Thursday's close, while the Nasdaq, on which ArtistDirect is listed, fell by 1%.
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