Rhapsody Buys Napster Subscribers from Best Buy
Rhapsody, the independent streaming music service spun off from RealNetworks, is acquiring Napster’s subscribers from Best Buy for a song.
Under the terms of the agreement, Rhapsody will give the big box electronics retailer a stake in its company in return for its Napster subscribers and certain other assets. Best Buy acquired the digital music company for $121 million in 2008.
The transaction is expected to close by the end of November.
The companies, which are claiming to have the two largest music subscriber bases in the U.S., did not disclose how many they will have together. Rhapsody said it will also use the assets to add to its product line. Separately, Rhapsody has reported that it has surpassed 800,000 subscribers.
In a statement, Jon Irwin, Rhapsody’s president, said, “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.”
The two companies likely have felt additional pressure as new subscription and ad-supported music services enter the U.S. market, such as Rdio and Spotify.