Consolidation is afoot in the digital music subscriptions market, as Rhapsody announced plans last night to acquire Napster. Well, at least to acquire its subscribers and ‘certain other assets’, with Napster’s current owner Best Buy taking a minority stake in Rhapsody in return. “This deal will further extend Rhapsody’s lead over our competitors in the growing on-demand music market,” says Rhapsody president Jon Irwin. “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… This is a ‘go big or go home’ business, so our focus is on sustainably growing the company.” In July this year, Rhapsody had 800,000 subscribers, while Napster had 700,000 when it was bought by Best Buy in 2008, but hasn’t updated those figures since. But it seems fairly certain that the deal will cement Rhapsody’s position as second behind Spotify’s two million subscribers in the music subscriptions market. The acquisition is expected to close in November, and Rhapsody will phase out the Napster brand in the US, although it’s unclear what will happen in the rest of the world. Source: Rhapsody Source: CNET Source: Evolver.fm
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