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The company's CEO, Chris Gorog, said that the music service now has more than 830,00 subscribers, making it the world's largest on-demand music subscriptions service, beating Real Network's Rhapsody as well as the combined figure for all other subscription services.

'In mid-March, we successfully integrated over 225,000

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AOL Music Now paid subscribers onto the Napster service, and our payment to AOL will be adjusted accordingly to reflect the actual subscriber count,' he said. 'We also enjoyed healthy organic growth adding another 40,000 net paid subscribers during the quarter.'

Napster has 785,000 premium subscribers plus some 45,000 university subscribers.

'Napster's number one market share position in on-demand music subscription together with our leadership position in wireless marketing partnerships, including our recently announced partnership with AT&T, creates a very healthy foundation for the continuing development of our business,' he said.

Napster subscribers pay a monthly fee to access the service's entire music collection. Tracks can be transferred to portable players that support Windows Media DRM but cannot be burnt to CD unless an additional fee is paid to download the track. Subscription-based songs can no longer be played if the subscription is cancelled.