In yet another reprieve for the file sharing site that would not say die, US retailer Best Buy has agreed to pay around $US121 million in cash for online music retailer Napster, the companies announced Monday.
For the money, Best Buy gets a database of 700,000 subscribers to Napster’s digital entertainment services, and its Web platform for streaming music. Best Buy foresees using that platform to sell content other than music, it said Monday.
Napster revamped its music download service in May, offering 6 million music tracks in MP3 format for sale without DRM (digital rights management).
Best Buy has owned part of Napster since December 2004, when it paid $US10 million for a stake in the company in a joint marketing agreement. That deal represented the commercial relaunching of the controversial content company with legitimate licensed content.
Napster’s board of directors has agreed to the deal, which the companies expect to close in the fourth quarter. The purchase will cost Best Buy around $US54 million, after taking into account Napster’s cash reserves.
Best Buy said it does not intend to make significant staffing changes. Under the terms of the deal, Napster CEO Chris Gorog and other managers will remain with the company.
Napster let the peer-to-peer file sharing genie out of the bottle when founder Shawn Fanning launched the MP3 search and exchange tool in mid 1999. It shut down in July 2001 and declared bankruptcy in 2002, but not before claiming a peak user base of 26.4 million users and creating a swelling market need that music labels were forced to accommodate.