Best Buy to buy Napster

September 16, 2008 | 08:56

Tags: #buy #mp3 #napster

Companies: #best-buy

Napster, vanguard of the music sharing revolution – and the first to attempt to commercialise its success by going legal – is to be purchased outright by US retail chain Best Buy according to a filing with the US Securities and Exchange Commission.

The filing, uncovered by BetaNews, states that Napster will receive $121 million (£68 million) including an up-front payment of $54 million (£30.5 million) as part of the planned merger.

Although the deal hasn't been formally ratified – Napster still has a twenty-day window of opportunity during which time it is able to reject the offer or seek alternative bids – it is believed that the pair have already hammered out a plan for the merger, making it more than likely that it will go ahead.

Best Buy's $121 million will get it Napsters' subscriber base of 700,000 paying customers, its web presence, and its freshly developed Napster To Go technologies aimed at mobile music subscription and playback. What isn't mentioned as part of the deal is the peer-to-peer file sharing technology that made Napster a household name – not really surprising, as it's a past the company is keen to distance itself from.

Interestingly, this isn't Best Buy's first outing with Napster: the company has partnered with Roxio in the past, who themselves purchased Napster back in 2004. Nor is it the first time the company has looked towards digital distribution of music: Best Buy has a running agreement with RealNetworks to make the Rhapsody song subscription service available on all compatible music players sold through its stores. Whether the planned purchase of Napster spells an end to this agreement is currently unknown.

Does Napster have a value in today's iTunes-dominated digital music market, or is Best Buy opting for second-best? Share your thoughts over in the forums.
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