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4 Thoughts On Best Buy & Napster

  •   Napster was worth even less than I thought. Given the $67 million in cash that Napster has on hand, the purchase for $121 million by Best Buy puts the valuation at just $54 million. Not much for a company with 700,000 subscribers, decent technology and a strong branNapsterd name.
  • This purchase is a blow for RealNetworks’ Rhapsody who previously pBest_buyowered Best Buys download store. It’s not fatal, but it isn’t good news as Rhapsody struggles to gain traction. (Thanks to an alert Hypebot reader for pointing this out.)
  • The integration of Napster into Best Buy may confuse consumers and tarnish wha ist left of the Napster brand. Or is that the point?  There’s not much left to Napster’s once powerful brand.
  • I’m having trouble imagining the synergies between online and brick and morter Best Buy that would help Napster grow. Dp you see any?

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3 Comments

  1. My guess would be best buy is looking to re-tool the failed Borders approach of a digital music kiosk where consumers can make custom mixes and search out music online to buy in-store. Perhaps they’re offering something more meaningful than a Best Buy branded CD-R to take home.

  2. It should be interesting, Rhapsody wasn’t happy with the Best Buy relationship anyway. Best Buy never delivered on most of the promises they gave to Rhapsody upon the signing of the agreement so I don’t think it’s much of a blow to Rhapsody.
    I thin it was a good buy for Best Buy, if Best Buy can help push mp3 players with unlimited music from Napster, that could be widely successful… As of now no one has been able to successfully get these into the main stream.
    Also if Best Buy can successfully integrate Napster with a mobile carrier similar to Verizon/Rhapsody’s VCast, Best Buy has the power to really push the service to the masses; widely distributing any phone platform with the service.
    Perhaps stereos coming with unlimited music from Napster? Car stereo systems with a free 6 months to Napster? I think the options are really limitless with them owning the company, there’s no red tape and there’s a lot of money to be made on existing products by integrating an unlimited music offer.
    Also Best Buy has always struggled with a solid online music solution, so this is the best purchase they could make… When you think about it, what other established company could they get? They needed a way to stay in the game and this is the only option really..

  3. I should also add to my note above. The one thing Best Buy really lacks is a “long tail” offer with it’s products. You sell a car stereo and thats that, unless they are needing new speakers. This makes it so they can keep making money off their existing customer base. Sell a 100 dollar stereo with the napster service and a year later they made an additional 100 dollars off that person.
    I realize with some of the ideas Napster isn’t there yet, but if they continue developing it will be soon enough.. The more I talk about it the more I am excited about this..

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