American retailer Best Buy is to buy Napster for $121 million, with the deal set to be completed in the fourth quarter of this year.
Best Buy will buy into 700,000 subscribers to their now-legal digital entertainment service with a $67 million cash and short term investment, valuing the company at almost double its share value.
"Best Buy intends to use Napster's capabilities and digital subscriber base to reach new customers with an enhanced experience for exploring and selecting music and other digital entertainment products over an increasing array of devices," Best Buy President and Chief Operating Officer Brian Dunn told the Wall Street Journal.
Sector
The move makes sense given Best Buy's increasing move into the sector. The chain has recently added mobile phone departments to all of its US stores after a well-publicised joint venture with the UK's Carphone Warehouse
There are no plans to replace Napster's current leaders, according to reports, but it remains to be seen just how Best Buy will incorporate Napster services into its business model.
Napster, which started to offer DRM free mp3 music this year, was once a byword for illegitimate music sharing, but legal pressure changed the nature of the site and it is now a very different animal.
Best Buy is the largest seller of consumer electronics in the US and is using the Carphone Warehouse deal to begin to look at entering the UK and European markets.
