Rhapsody on Monday announced that they have purchased the Napster music platform from current owner Best Buy. The company also announced that Best Buy will retain a small minority stake in the company.
The acquisition is expected to close on November 30 and financial terms for the deal have not yet been disclosed.
After revamping their platform in 2008 Napster was purchased by Best Buy as a means to enter the online music space however Napster never really seemed to take off and Best Buy mostly used the service for in-store promotional purposes.
Best Buy purchased Napster at $2.65 per share for a valuation of $121 million at a time when Napster was reporting 700,000 subscribers. At this time exact subscriber numbers are unclear.
It will be interesting to see how Rhapsody uses Napster to their advantage, for the last decade Rhapsody has pioneered the music subscription model which is now used by various platforms with increasing success including MOG, Spotify and Pandora.
At this time Rhapsody has not revealed how they will integrate the two networks and who they will retain from the Napster team, since the purchase occurred through Best Buy it’s hard to tell how much of the purchase was a “technology buy” more than a “talent buy” as we have seen from various tech acquisitions over the years.
Do you think purchasing Napster was a smart move for Rhapsody?