The largest premium on-demand music service in the US, Rhapsody (not available in SA), has announced that it has signed an agreement with the pioneering peer-to-peer file sharing internet service Napster. Under the terms of this agreement, Rhapsody will acquire Napster’s subscribers as well as certain other assets.

American consumer electronics retailer Best Buy, who currently owns Napster, will receive a minority stake in Rhapsody. The financial details of the transaction were not disclosed, but the deal is expected to close on or around 30 November 2011.

"This deal will further extend Rhapsody's lead over our competitors in the growing on-demand music market," said Jon Irwin, president of Rhapsody. "There's substantial value in bringing Napster's subscribers and robust IP portfolio to Rhapsody as we execute on our strategy to expand our business via direct acquisition of members and distribution deals."

The deal will combine the subscriber bases of the two largest premium on-demand music services in the States and will enable Rhapsody to enhance its product line.

"Rhapsody has demonstrated that it has what it takes to build a profitable business in the increasingly competitive on-demand music market," said Chris Homeister, senior vice president and general manager of entertainment for Best Buy. "We are confident they are the right partner to provide Napster's existing subscriber base with an immersive digital music experience moving forward."

 

"This is a 'go big or go home' business, so our focus is on sustainably growing the company," explained Irwin. "We're excited to welcome Napster music fans to the best on-demand music experience anywhere. Our new members will have more places to connect to the music they love and to discover new favorites, guided by Rhapsody's rockstar editorial team and the tastes of other Rhapsody members via our innovative social features."