Blog Post

Rhapsody Is Acquiring Napster From Best Buy

Streaming music service Rhapsody is acquiring Napster’s subscribers and “certain other assets,” the companies announced today. Napster is currently owned by Best Buy, which will retain a minority stake.

Rhapsody president John Irwin said in a statement that, in addition to its subscribers, Rhapsody is acquiring Napster’s “robust IP portfolio.” Terms of the deal were not disclosed. Rhapsody said it is the “largest premium on-demand music service” in the U.S., with over 13 million songs in its database. Napster, the pioneering peer-to-peer file-sharing service before being forced to resort to more legal methods, says it has over 15 million songs, so it appears that current Napster subscribers will lose access to about two million songs. The deal is set to close around November 13.

Neither company stated how many subscribers it has. Napster had around 700,000 subscribers when it was acquired by Best Buy for $121 million in 2008.

Spotify, with its freemium model, has stolen the spotlight from older fee-based services like Rhapsody and Napster in recent months. Rhapsody temporarily extended its free trial period to 60 days from 14 this spring, but is now back to a 14-day free trial, followed by subscription prices starting at $9.99 per month. Napster offers a one-week free trial and plans starting at $5 per month. It’s unclear whether Rhapsody will drop its prices for former Napster subscribers, who will now be paying at least twice as much as they had been.

Napster was originally launched in 1999 as the first major peer-to-peer file-sharing network, allowing users to download pretty much any song for free. Many lawsuits from the music industry followed, leading to Napster’s shutdown and a settlement in 2001. The company liquidated in 2002; after a few troubled years, Best Buy bought it in 2008.