Rhapsody and Best Buy Finalize Napster Buyout
Music subscription service Rhapsody is set to increase its number of subscribers through its purchase of Napster from Best Buy.
Rhapsody has acquired Napster from Best Buy Monday for an undisclosed fee. The deal is expected to be finalized on Nov. 30, 2011.
Jon Irwin, president of Rhapsody, gave his opinion on the deal: "There's substantial value in bringing Napster's subscribers and robust IP portfolio to Rhapsody as we execute on our strategy to expand our business via direct acquisition of members and distribution deals."
Rhapsody and Napster are known for having the largest subscriber bases out of all the current music subscription providers.
Rdio, Spotify, and Mog are the other music subscription businesses in place next to these two companies.
Napster began as one of the most successful file-sharing services. The company gave users the ability to share songs with other users via the Web. Several lawsuits filed by record companies and artists hurt the company and the brand and trademark were eventually sold. A similar subscription service took over the Napster name and trudged on thereafter, but to little success.
Best Buy first purchased Napster in 2008, enabling the retail franchise to enter into the online music business. Both companies' current subscribers bring in a high number together and introduce new customers because of the new deal. Rhapsody reportedly has 800,000 current subscribers for its service next to Napster's 700,000.
Rhapsody was previously owned by RealNetworks and Viacom, but those companies spun off the service in April 2010. Best Buy came into purchasing Napster by buying its shares at $2.65 apiece. The total purchase price of those shares was reported to be $121 million.
Rhapsody was one of the first companies that attempted to push the subscription music service idea to customers. Record labels have now followed suit and tried to adopt a music streaming model for their content as well. Rhapsody's partnership with social media sites, such as Facebook and Twitter, is also expected to help the company reach out to even more potential users.
