Napster No More: Rhapsody Nabs Subscribers, Assets

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Napster’s long, troubled life is finally coming to an end, with Rhapsody acquiring the service’s subscribers and assets from Best Buy. The Napster brand will be phased out as part of the deal.

Napster was best known for its early run as a peer-to-peer music sharing service (read: a way to download pirated MP3s) before the advent of iTunes and Amazon MP3. After the music industry successfully sued Napster for copyright infringement in 2000, the company filed for bankruptcy and liquidated its assets in 2002. Best Buy bought the brand from Roxio in 2008, and will receive a minority stake in Rhapsody in exchange for Napster.

(MORE: How to Roll Your Own Music Streaming Service)

As a legitimate streaming service, Napster lacked a strong hook to stand out from the pack. Under Best Buy, Napster first gave away a monthly allotment of MP3s along with its desktop streaming service, but ditched that aspect when it started offering mobile streaming in late 2010. By then, competitors Rhapsody, Rdio and MOG had already gone mobile.

Rhapsody needs to bulk up if it wants to do battle with Spotify, whose free service and Facebook integration have made it a rising star in streaming music. Whether Rhapsody will launch its own free version is unclear. The company is only tacking on paid subscribers with this deal.

“This is a ‘go big or go home’ business, so our focus is on sustainably growing the company,” Rhapsody President Jon Irwin said in a statement. As of July, the company had 800,000 subscribers, but Rhapsody isn’t saying how many subscribers it will add through the  Napster acquisition, or when those subscribers will have to make the transition to Rhapsody.

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