Digital music service Rhapsody signed an agreement on Monday to acquire its similarly US-based competitor Napster from technology retailer Best Buy. As part of the deal Best Buy, which paid $121m for Napster in September 2008, will obtain a minority stake in Rhapsody.
The monetary figures for the transaction were undisclosed but the terms will include Rhapsody acquiring Napster’s current subscribers as well as unnamed additional assets. The transaction is expected to close at the end of November.
The accumulated subscriber bases of the two services, which provide on-demand streaming of songs to their users, is set to be the largest in the US. The move comes three months after UK-based competitor Spotify launched its own digital music streaming service in the US.
Chris Homeister, senior vice president for entertainment at Best Buy, said: "Rhapsody has demonstrated that it has what it takes to build a profitable business in the increasingly competitive on-demand music market. We are confident they are the right partner to provide Napster’s existing subscriber base with an immersive digital music experience moving forward."