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Rhapsody buys Napster from Best Buy

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Did you know that Napster was still alive? We almost forgot. Facing young competition from Spotify and other services, Rhapsody has decided that it’s easier to buyout the competition. Today, the number one subscription music service (Rhapsody) will purchase the number two music subscription service (Napster) from its owner, Best Buy, which purchased the company in 2008. Many will remember Napster for its origins as a free service that promoted MP3 file sharing, something

“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.”

Users of the Napster service, which once had the slogan “have everything, own nothing,” will be migrated to Rhapsody. However, those who are on the cheaper PC-only plan for $5/mo will be forced to upgrade to one of Rhapsody’s $10+ plans. “We are targeting to have all Napster subscribers migrated into the Rhapsody system by the end of November, including all relevant music data (playlists, library, preferences, etc.),” a representative told us via email. “Any Napster customers who have  MP3 credits will receive equivalent value in credits in the Rhapsody system. After the deal closes, Napster subscribers on a pricing plan equivalent to a plan offered by Rhapsody will be able log in as a Rhapsody subscriber. Napster subscribers on the 5 for $5 (combined PC-only streaming and MP3 download) plan will be offered an opportunity to migrate to the Rhapsody mobile streaming plan.”

The question is, can purchases like this help Rhapsody stay on top when a slew of newer, more popular streaming services seem to be bubbling up and embedding themselves in popular platforms like Facebook. Iheartradio, Rdio, Spotify, Mog, and other sites threaten to make Rhapsody look like the old horse in the race. Will buying an even older horse like Napster really solve that problem? And is Best Buy giving up on selling media online? It seems woefully stuck in its brick and mortar ways for a technology retailer.

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