Feeds

Best Buy snaffles Napster

Retailer fancies 'platform'

Bridging the IT gap between rising business demands and ageing tools

Napster's board has unanimously accepted a takeover bid from US retail behemoth Best Buy, worth $120m. Thus ends a bumpy four-year ride as an independent company.

Like Frankenstein's monster, the reanimated Napster was constructed from the parts of formerly deceased music companies. Software vendor Roxio acquired the assets of the bankrupt rebel P2P outfit for just $5m in late 2002, and acquired the remains of Sony's unsuccessful music service PressPlay six months later. After the injection of electricity, and $20m, Napster went live five years ago this month.

Promoting a rental music service has been hugely expensive. Faced with marketing expenses that at times reached 85 per cent of its total spending, Napster has not been profitable. It has been better at managing its cash than many suppose, however: In its most recent quarter, Napster lost $4.4m on revenue of $30.3m - yet ended the quarter with around $70m in cash.

Yet the market trend isn't promising.

Revenues are static, year-on-year, and much of Napster's steady revenue (and 700,000 subscribers) comes via higher education deals, where a subscription is compulsory. If the mooted plan to legalise P2P in US universities through collective licensing becomes a reality, than that revenue source is set to disappear.

Not surprisingly, then, Best Buy's president talked up Napster's "platform" and mobile potential in a prepared statement - and said nothing about its consumer brand.

"Best Buy is uniquely positioned to benefit from Napster's digital entertainment distribution platform. We are looking forward to combining our digital media capabilities with Best Buy's resources and global network to extend our digital content platforms," he said.

I think we get that message.

As an indication of how hard Napster tried to convert the public to paying for rented music, here's a poster campaign from 2005:

Napster: 'Own Nothing - Have Everything'

That worked out well, then.

Best Buy recently pumped $1bn into a joint venture with Carphone Warehouse to expand the mobile phone chain into consumer electronics. ®

Application security programs and practises

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.