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Rhapsody to buy Napster from Best Buy in music shakeup

updated 01:45 pm EDT, Mon October 3, 2011

Rhapsody consolidates streaming with Napster deal

Rhapsody shook up online music Monday by buying Napster. The deal will put the two streaming and download music services together. Cash involved in the deal wasn't mentioned, but Napster's now former owner, Best Buy, will have a minority stake in the combined service.

The deal is small enough that the two expect it to be approved and closed by November 30.

In making the deal, Rhapsody president Jon Irwin made clear that it was a market share grab, hoping to "further extend" a Rhapsody lead. Along with sheer subscribers, it should give some intellectual property and possibly features that Rhapsody doesn't already have.

The acquisition is likely a direct reaction to the arrival of Spotify in the US. As the biggest music service in Europe and now enjoying a tighter link with Facebook, Spotify is expected to grow quickly and could overshadow the much older Rhapsody. Originally started by RealNetworks in 2001, Rhapsody was one of the first legal Internet services but was almost immediately eclipsed by Apple's iTunes Music Store in 2003 as customers preferred the pay-per-track model at the time.

Rhapsody may be counting on a sudden swing back towards cloud music as faster landlines, 3G, and 4G make streaming more of an option. Rhapsody has had a pay-per-song store but usually considers it secondary.



By Electronista Staff
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Comments

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +1

    Is Best Buy the next Amazon?

    Hmmm. Maybe Best Buy is looking to Amazon for inspiration. Best Buy has tons of retail stores, which could be used the way Amazon uses their warehouses as shipping hubs. Best Buy also has good mindshare. And now they're branching out into digital content.

    Who knows? Maybe Best Buy will ship a Kindle Fire-killer soon...

  1. rvhernandez

    Fresh-Faced Recruit

    Joined: Apr 2005

    +4

    Fail

    One failing business buying another. Move on, nothing to see here...

  1. JackWebb

    Fresh-Faced Recruit

    Joined: Aug 2007

    -1

    Could be a good merge

    Hopefully the catalog improves from this. Napster has some albums Rhapsody doesn't and is cheaper but Rhapsody has a better though-out interface which makes it easier to track and find things although some improvement in Rhapsody's interface came with losing some features which is annoying. Spotify has a very good selection and definitely has things Rhapsody and Napster don't such as better Trance selection. Spotify has a Mac desktop app which is pretty nice although it needs some work but seems mostly as good as Rhapsody's web interface, just different, and Spotify has the best possible quality (320Kbps mp3) streaming. Hopefully the Napster Rhapsody merge gets the best of both.

  1. boris_cleto

    Fresh-Faced Recruit

    Joined: Sep 2002

    +1

    Shuffling the deck chairs

    on the Titanic.

  1. JTh

    Fresh-Faced Recruit

    Joined: Sep 2007

    +1

    Re: fail

    Guess I must be missing the failing business model, having been a (very happy) rhapsody subscriber for 10 years now. Please feel free to back up your assertion in the future. (and let the thumbs down begin!)

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