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Napster Merges With Rhapsody

Jeremy Muncy — Fri, 02 Dec 2011 15:13:46 +0000

It’s a sad day for fans of old school file-sharing, as Napster is no more.

Starting yesterday, Napster officially began merging with Rhapsody, the largest on-demand music service in the United States. Back in October, Best Buy, the parent company of Napster, agreed to sale to Rhapsody for an undisclosed amount of money.

“This deal will further extend Rhapsody’s lead over our competitors in the growing on-demand music market,” said Jon Irwin, president, Rhapsody. “There’s substantial value in bringing Napster’s subscribers and robust IP portfolio to Rhapsody as we execute on our strategy to expand our business via direct acquisition of members and distribution deals.”

Combining the subscriber bases of the two largest on-demand music services will allow Rhapsody to further enhance it’s offerings, and try their damnedest to stay ahead of Spotify (where Napster co-founder, Sean Parker, is a major investor). According to Adam Parness, the senior director of music licensing for Rhapsody, they’ve seen an increase in subscriptions for the service since Spotify came state side. “We have seen tremendous growth since spotify came onto U.S. soil,” he said. “It validates our model.”

It’s unclear how many subscribers Rhapsody gained, seeing how the merger is now complete.

What are some of your memories of Napster? Will it be remembered fondly? Let us know your thoughts in the comment area below.

Napster Acquired by Rhapsody

Chris Crum — Mon, 03 Oct 2011 18:58:53 +0000

Rhapsody announced today that it has agreed to acquire Napster from Best Buy. That includes the subscribers and “certain other assets” which remain unspecified. For the acquisition, Best Buy gets an also unspecified minority stake in Rhapsody.

As a result of the acquisition, Rhapsody will simply add the Naspter subscriber base to its own for one combined subscriber base. Here are some statements the company released:

“This deal will further extend Rhapsody’s lead over our competitors in the growing on-demand music market,” said Jon Irwin, president, Rhapsody. “There’s substantial value in bringing Napster’s subscribers and robust IP portfolio to Rhapsody as we execute on our strategy to expand our business via direct acquisition of members and distribution deals.”

“Rhapsody has demonstrated that it has what it takes to build a profitable business in the increasingly competitive on-demand music market,” said Chris Homeister, senior vice president and general manager of entertainment for Best Buy. “We are confident they are the right partner to provide Napster’s existing subscriber base with an immersive digital music experience moving forward.”

“This is a ‘go big or go home’ business, so our focus is on sustainably growing the company,” said Irwin. “We’re excited to welcome Napster music fans to the best on-demand music experience anywhere. Our new members will have more places to connect to the music they love and to discover new favorites, guided by Rhapsody’s rockstar editorial team and the tastes of other Rhapsody members via our innovative social features.”

The deal is expected to close at the end of November.

While Napster might not get the attention it once did, there’s no question that it had an incredible impact on the music industry and how people find music online.

Spotify Gets Sean Parker’s Approval…In a Big Way

Josh Wolford — Thu, 14 Jul 2011 21:25:15 +0000

It’s always interesting when past voices in a particular area talk about the up and coming, brand new thing. It was interesting when MySpace’s Tom Anderson discussed Google+ shortly after it launched. And today, it is even more interesting to read what Sean Parker has to say about Spotify.

Of course, you know ~~Justin Timberlake~~ Sean Parker, right? Mr. Napster. I thank Sean Parker every night in my prayers for allowing me to be the cool kid in middle school with all the bitchin’ tunes. Seriously.

On the American launch day of the previously Euro-limited streaming music service Parker wrote a Facebook note that could be described as “excited.”

Absolutely beside himself with excitement, more like it.

Check out his note, in its entirety below –

My thoughts on Spotify launch…

Today represents the realization of a dream. For a decade I have waited for a music service that could rekindle my excitement about music by enabling music to be shared freely across the world — all the while empowering artists to reap the economic benefits of selling their music.

Spotify is the service I have been waiting for.

Since Napster the recorded music business has been steadily declining and, until now, there has been no light at the end of the tunnel. Today’s historic announcement marks the reversal of this downward trend and the beginning of a return to growth by the recorded music business.

Spotify promises to get people excited about music again, and the result will be a new golden age of music–more people discovering and listening to more music than ever before. Spotify is removing the barriers to sharing music with friends so that music can move freely and find its fans organically. In this hyper-efficient system great music will find its natural audience. This means that more artists will find success, more fans will discover them, and artists will make more money selling their music than they thought possible. The rusty gears of the record business will turn again.

Since Spotify takes music viral, listening to music online is finally going to be a social experience. (Just like it’s always been offline.) And by making music social the experience of discovering and listening to new music will be more fun than ever before. While Spotify can be downloaded and used or free on the desktop, users of Spotify will need to purchase content when they want to take music with them “on the go” via their iPod or iPhone. In this sense, Spotify is the answer to piracy: migrating millions of piracy-based music fans to a legitimate platform where their consumption of music can be monetized and the artists who dedicate their lives to creating music can finally get paid.

So, Parker thinks that Spotify is not only a wonderful, fun, smooth experience, but that it also the savior of the music industry. Parker also hits the point that stood out too me when I first got my hands on Spotify – the social presence. Spotify truly wants its service to be about sharing – from the integration with Facebook and Twitter to the “gifting” of songs to friends.

But is it the answer to piracy, as Parker says?

I don’t know about all that.

Check out my hands-on first look at Spotify here.

[Hat tip to Tech Crunch]

[Image Wikipedia]

This Is The New $5 Napster

Bruce Houghton — Fri, 29 May 2009 19:40:13 +0000

What Do You Think Of The New Napster?

I’ve spent some time on the new Napster service over the last few days, and aside from a less than intuitive interface, I can’t find much to dislike. At just $5 a month for unlimited streaming of a deep catalog along with 5 mp3′s monthly, the service is effectively free. And if I’m in Napster previewing a track or album (and since they’ve already got my credit card), why not just buy it there instead of jumping over to Amazon or iTunes?

Reports are that Napster got a special deal on streaming licenses from the labels…

in part because they tied listening so closely to purchase. There is probably no one size fits all model that will dominate the digital music future. Many (myself included) love Spotify both for its model and an iTunes like interface. But imeem, Pandora, Last.fm and others also each approach music discovery and enjoyment from their own intriguing angles.

I suspect that there’s an audience for the new $5 model, paticularly for those comfortable with the Napster and parent Best Buy brands. What do you think of the new Napster? Where are you discovering and enjoying music?

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Thoughts On Napster & Best Buy

Bruce Houghton — Wed, 17 Sep 2008 19:31:47 +0000

4 Thoughts On Best Buy & Napster

Napster was worth even less than I thought. Given the $67 million in cash that Napster has on hand, the purchase for $121 million by Best Buy puts the valuation at just $54 million. Not much for a company with 700,000 subscribers, decent technology and a strong brand name.
This purchase is a blow for RealNetworks’ Rhapsodywho previously powered Best Buys download store. It’s not fatal, but it isn’t good news as Rhapsody struggles to gain traction. (Thanks to an alert Hypebot reader for pointing this out.)
The integration of Napster into Best Buy may confuse consumers and tarnish wha ist left of the Napster brand. Or is that the point? There’s not much left to Napster’s once powerful brand.
I’m having trouble imagining the synergies between online and brick and morter Best Buy that would help Napster grow. Do you see any?

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Napster Is Best Buy For Best Buy

WebProNews Staff — Mon, 15 Sep 2008 15:02:46 +0000

Best Buy will have some music to offer alongside all that portable gadgetry soon. The company announced this morning the acquisition of Napster for $121 million in cash.

Along with Napster comes 700,000 digital entertainment subscribers, its Web-based customer service platform, and mobile services, and, by the sound of it, probably all of Napster’s 140 employees. Execs at the top, under conditions of the merger agreement, will continue to run what will be by the end of the fourth quarter a wing of Best Buy. As for the rest, the company says it doesn’t plan to make any significant changes and will not relocate.

Best Buy cited Napster’s comprehensive and easy-to-use music platforms like streaming, subscription, and individual sales as what made the company attractive. No doubt digital content has a lucrative future, as demonstrated by Apple’s iTunes. Likely the company will be able to (and would be smart to) offer promotional deals on music alongside featured mobile technology in the future.

Brian Dunn, president and COO of Best Buy says as much. “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.”

One can imagine buying an MP3 player and being able to load a selection of songs to it before leaving the store. But from the words of executive VP Dave Morrish, they may have broader plans. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions. We’re very excited to add these capabilities to leverage our existing relationships with the labels, the studios, and the hardware providers.”

It harks back to Blockbuster’s temporary and eventually withdrawn bid for Circuit City. We may be seeing the emergence of a trend where electronic retailers and content providers increasingly team up as a real world answer to virtual world business models.

The price of $121 million seems kind of light for a company that brought in $127 million just last year, but as Best Buy was happy to point out, Napster actually posted a $16 million loss last year, which was a marked improvement over losing $36.8 million the previous year.

Napster Is Losing Subscribers

Bruce Houghton — Tue, 12 Aug 2008 16:37:29 +0000

The latest financial report from Napster showed only slightly wider losses of 4.4 million up from 4.3 million in the previous quarter. But a closer look at the numbers painted a much bleaker picture..

Raising the music subscription price from $9.95 to $12.95 monthly has led to to drop in subscribers from 760,000 to 708,000 just 90 days prior. A switch to DRM free mp3 downloads failed to ignite much interest with download sales rising just 5% overall for the quarter. Read the full financial report here.

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The Online Mistakes Of The Music Business

Mike Sachoff — Wed, 12 Mar 2008 14:51:21 +0000

In the April issue of Blender, they take a look at the "20 biggest record company screw-ups of all time."

Topping the list is the major record labels and the Recording Industry Association of America (RIAA) for rejecting a billion dollar settlement from Napster and not finding a way to make money off file sharing services.

The report says, "The labels’ campaign to stop their music from being acquired for free across the Internet has been like trying to cork a hurricane-upward of a billion files are swapped every month on peer-to-peer networks. Since Napster closed, ‘there’s been no decline in the rate of online piracy,’ says Eric Garland of media analysts BigChampagne.

The much-loathed RIAA appears again at number five for suing single mother of two Jammie Thomas for using the P2P service Kazaa to illegally share MP3 files of 24 songs. Last October she was found guilty and ordered to pay $222,000 in fines which equals $9,250 per song. Thomas is planning to appeal.

Coming in at the number nine spot is Sony BMG for putting copy-protection software on CDs, which installed a "rootkit" on users computers along with not allowing people to make more than three copies of legally purchased CDs and making them vulnerable to viruses.

The Department of Homeland Security issued an advisory and Sony recalled 4 million CDs. The label was accused of spying on its customer’s listening habits and ordered to pay several million dollars to settle class-action lawsuits that alleged violations of spyware laws.

Landing at number 19 is the recording industry’s decision to abandon the single format and force people to buy entire albums. "Greed to force consumers to buy an album [resulted] in the loss of an entire generation of record consumers," says Billboard charts expert Joel Whitburn.

"People who could only afford to buy their favorite hit of the week were told it wasn’t available as a single. Instead, they stopped going to record shops and turned their attention to illegally downloading songs."

Napster’s CFO Set To Leave

Doug Caverly — Tue, 11 Dec 2007 14:26:57 +0000

If the CFO of a highly successful company were to quit for “personal reasons,” an eyebrow or two might need to be raised. But Nand Gangwani, the CFO of Napster, is stepping down, and, well, there you have it.

At $2.36 per share, Napster’s stock is not the sort of thing to which any self-respecting chief financial officer would want to be tied; it’s rarely a good sign when 4-year-olds can afford to invest in a company.

Shifting even more of our suspicion from Gangwani to his employer is the statement Napster put out to announce his departure. “Mr. Gangwani has been commuting from his home in the Bay Area to Los Angeles for the last four years,” it noted. Is that to imply a certain amount of drive time affected the CFO’s decision?

Napster also seems unjustifiably optimistic about its future. Yet in any event, Gangwani will stay onboard in an official capacity through the end of the year, and will supposedly help whoever is found to replace him adjust to his (or her) new job.

Gangwani seems to have handled his resignation in a professional manner. Here’s hoping that, if he decides to go back to work, he’s able to find something closer to home and with a stock above $5 per share.

AT&T Makes 5 Million Napster Songs Available

Mike Sachoff — Mon, 22 Oct 2007 14:30:09 +0000

AT&T announced today that it would allow its subscribers to download music from Napster’s catalog of over five million songs directly to their cell phones. The service will launch early next month.

The Napster Mobile service will further AT&T’s entry into music. In July, it launched a service called eMusic, which focused on independent music. The partnership with Napster will also make AT&T more competitive with Verizon Wireless and Sprint Nextel.

"To the extent that there are music aficionados who haven’t engaged in our services, this gives us a great opportunity to drive the business," Mark Collins, who heads up consumer data services for AT&T told the Dow Jones wire service. "It’s one part of our multipart strategy."

The price of a single song is $1.99, or $7.49 for five songs per month. Subscribers who download songs to their cell phones will receive an email message that allows them to put a second copy on their computers. Users who have existing songs through Napster can transfer them to their phones.

The partnership with AT&T provides Napster with access to a larger customer base in the U.S. Napster has smaller arrangements in both the U.S. and overseas. Napster hopes that working with AT&T will help the company to better compete with Apple’s iTunes. The service will not be compatible with the iPhone.