Best Buy Acquires Napster For $121M
1:25 pm, September 15th, 2008, Ed Sutherland
Electronics retail giant Best Buy Monday announced it would acquire Napster for $121 million. The Minneapolis-based company told Cult of Mac the move wouldn’t harm its growing relationship with iTunes owner Apple.
“Our relationship with Apple is strong and will continue to be so,” said Susan Busch, Best Buy Corporate PR Director.
The acquisition of the digital music service would become “a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions,” Best Buy Executive Vice President Dave Morrish, said in a statement.
As part of the acquisition, Best Buy gains Napster’s 700,000 subscribers, its online platform and mobile technology. Napster CEO Chris Gorog and senior management would stay on. The retailer will keep Napster’s headquarters in Los Angeles, where it employs 140 workers.
Best Buy could use Napster to attract consumers still unsure of digital music.
“They might be able to find a business in bringing in late-adopters or stragglers into the online music market by virtue of their breadth of products and service,” Mike McGuire’s Gartner’s media analyst, told Cult of Mac.
McGuire said that while iTunes and Napster may have been rivals when they first arrived on the digital music scene, Napster has never been a threat to Apple. This may be why Best Buy emphasized it will still sell the Apple iPhone.
In May, Napster took a swipe at iTunes, announcing it would sell 6 million DRM-free songs, calling it “the largest major label MP3 catalog in the industry, but also the largest library of independent music available anywhere.” McGuire, however, saw the MP3 effort as “something a bit more than an afterthought, but not much more.”
Photo courtesy: Tronick
Posted by Ed Sutherland in Apple, iTunes | Comment on this article
