Amid rumour and counter rumour, Napster is the centre of attention in the run up to its expected earnings announcement on 8 February. A source within the company is alleged to have said to Digital Music News that large numbers of employees are facing the chop amid a worsening financial situation. At worst, the company could be facing a sell-off or outright closure.

Napste denied the claims according to The Register but the axe seems to be hanging over the UK in particular. It’s a bit of deja vu as Pressplay, the forerunner and foundation stone of the new Napster, was prepped and ready to launch in the UK in 2002 but when doubts loomed and it looked a tough fight, the US parent cut off the UK limb to focus on the core US business.

Despite improving revenues, Napster’s losses have deepened and the latest news that Apple’s iTunes has an 83% market share will not help matters. Napster is also facing increased competition with Real relaunching Real Music as a web presence in Europe, major retailers such as HMV and Virgin utilising their immediate contact with music shoppers and, of course, the continuing struggle to sell the subscription story – which is a tough nut to crack and certainly needs time. But does Napster have much left?