Best Buy to acquire Napster for $121 million

Posted:
in iPod + iTunes + AppleTV edited January 2014
Best Buy said Monday it has agreed to purchase Napster Inc. for $121 million as part of a bid to accelerate growth in the emerging industry of digital entertainment and leverage its relationships with content studios.



The deal, which values Napster at $2.65 per share, is expected to close during the fourth calendar quarter and includes the service operator's approximately 700,000 digital entertainment subscribers, its Web-based customer service platform, and mobile capabilities.



Best Buy said intends to use Napster?s assets to reach new customers with an enhanced experience for exploring and selecting music and other digital entertainment products over an increasing array of devices.



"This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers," said Brian Dunn, President and COO of Best Buy. "Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want."



In May, Napster openly challenged Apple's iTunes Store when it launched an a la carte download service filled with DRM-free tracks that are compatible with both the iPod and iPhone. The service offered 6 million songs and was billed as "more than 50 percent larger than any other MP3 store" and not only the "largest major label MP3 catalog in the industry, but also the largest library of independent music available anywhere."



Best Buy, which partners with Apple on the sale of Macs, iPods and iPhones, said the addition of Napster will help it build stronger relationships with customers, expand the number of subscribers to Napster's service, and capture recurring revenue by offering ongoing value over a mobile digital platform.



Napster has approximately 140 employees, with its headquarters in Los Angeles. At this time, Best Buy does not plan to relocate Napster?s headquarters or to make significant changes in personnel.
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Comments

  • Reply 1 of 24
    "Naspter"?
  • Reply 2 of 24
    Quote:
    Originally Posted by brianus View Post


    "Naspter"?



    Heh, clearly they bought the wrong company.



    This is in direct rebuttal of Apple's passing Best Buy, et al, as the #1 music store anywhere. So while Apple and Best Buy are amicable in hardware sales, they go toe-to-toe as competitors in music and movies.



    It makes sense for Best Buy to try it, but we'll see. Napster has failed so many times already.
  • Reply 3 of 24
    buckbuck Posts: 293member
    The key buzzword is enhanced experience. Yech. It might become successful if they start selling male enhancement thru Napster.
  • Reply 4 of 24
    paxmanpaxman Posts: 4,595member
    Best Buy - Napster - Huh?
  • Reply 5 of 24
    ytvytv Posts: 109member
    Shawn Fanning FTW!!!
  • Reply 6 of 24
    Maybe something to do with this.... http://arstechnica.com/news.ars/post...ere-group.html
  • Reply 7 of 24
    Napster was a blessing to me. Even though downloading music through Napster used to be illegal, it really was the ultimate F-bomb to the superficial music industry. They are the one's who are doing the stealing - that is, stealing money from customers to sell overrated music!



    I really hated it when Napster became a music service. Now I hate it even more now that it will be even more corporate. I'm sure Kurt Cobain would be flipping off those people from above right about now!
  • Reply 8 of 24
    Wow, they are high for buying this. What a friggin' waste of money.
  • Reply 9 of 24
    Wake us in three years when Best Buy announces they're divesting themselves of Napster for "not meeting [their] performance expectations" or some other bogus double-talk.



    You really cannot teach an old dog new tricks. You euthanize the dog and get a new one.
  • Reply 10 of 24
    Quote:
    Originally Posted by Dogcow View Post


    Maybe something to do with this.... http://arstechnica.com/news.ars/post...ere-group.html



    That's a very good guess. Though, as the article notes, the framework for DECE has yet to be defined. I wondered if each retail member of the consortium would take it upon themselves to create a unique distribution system (to be the "masters of their own fate", as it were). That looks to be the case if the Napster purchase is tied to DECE.
  • Reply 11 of 24
    Quote:
    Originally Posted by jcassara View Post


    That's a very good guess. Though, as the article notes, the framework for DECE has yet to be defined. I wondered if each retail member of the consortium would take it upon themselves to create a unique distribution system (to be the "masters of their own fate", as it were). That looks to be the case if the Napster purchase is tied to DECE.



    That may be the reason for the Napster purchase, but DECE is a long way off and if I were guess now I'd say that the first iteration will fail.
  • Reply 12 of 24
    Clearly, every large music retailer is beginning to understand that the future of music and movies is digital and their dead inventory situation can be alleviated by moving to the Apple model... trouble is, only Apple has the end-to-end solution.



    Best Buy will end up taking a loss. I give it 1 to 2 years at most.
  • Reply 13 of 24
    Quote:
    Originally Posted by SpamSandwich View Post


    trouble is, only Apple has the end-to-end solution.



    Doesn't MS' Marketplace play on Windows, Zune and 360?
  • Reply 14 of 24
    Wow, I was planning on applying for a job at Best Buy Corporate HQ today... but this, in addition to the over-expanding thing they have going on shows a clear lack of direction on their part. The only logical thing they've done in years is started stocking Apple products.
  • Reply 15 of 24
    Quote:
    Originally Posted by solipsism View Post


    Doesn't MS' Marketplace play on Windows, Zune and 360?



    I suppose I should say Apple is the "most successful" end-to-end solution.
  • Reply 16 of 24
    I'm surprised anyone would even pay $1 million for Napster. You want Napster's brand recognition? Best Buy has a stronger 'brand' if they were looking to get into this arena. This is sort of like buying the Atari, Amiga, or Commodore brand for your company -- 10 years after they were even relevant in the industry. Many have tried that and we sort of know how it ended up.
  • Reply 17 of 24
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by Crtaylor View Post


    Napster was a blessing to me. Even though downloading music through Napster used to be illegal, it really was the ultimate F-bomb to the superficial music industry. They are the one's who are doing the stealing - that is, stealing money from customers to sell overrated music!



    Two wrongs don't make it right. If you don't like the price, that doesn't mean it's OK for you to just take it anyway. Just because you don't like the price doesn't make it theft on their part either, you don't have to buy it and you don't have to take it.



    If you don't want to support the RIAA, then supporting non-RIAA labels and non-RIAA bands would do a better job of sending that signal.
  • Reply 18 of 24
    ytvytv Posts: 109member
    Quote:
    Originally Posted by SpamSandwich View Post


    Clearly, every large music retailer is beginning to understand that the future of music and movies is digital and their dead inventory situation can be alleviated by moving to the Apple model... trouble is, only Apple has the end-to-end solution.



    Kind of an ironic statement, as I see people all the time on this board pleading for Apple to come out with a subscription service, that would mirror who? Yep Napster.



    Napster has been on the rise for the past few years now and they are actually VERY popular in Japan.



    5 years from now when almost all music will be by subscription service, I doubt that the Apple fanboys, will give any credit to Napster.



    Well the people who pay for music anyways. I'll keep my mIRC and Limewire.
  • Reply 19 of 24
    Next, Amazon to buy Rhapsody.
  • Reply 20 of 24
    eckingecking Posts: 1,588member
    I don't think they needed to buy napster, the napster brand isn't even strong, with all their ties they could have built there own presence and just bought some key napster people for a whole lot less if they wanted.
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