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Best Buy Coughs Up $54 Million For Napster
Posted by
ScuttleMonkey
on Mon Sep 15, 2008 11:29 AM
from the so-i-heard-you-got-robbed dept.
from the so-i-heard-you-got-robbed dept.
MarketWatch reports that Best Buy has decided to toss $54 million into an acquisition of Napster. All told, the deal amounts to around $121 million, with about $67 million headed towards getting cash and short-term investments from Napster's balance sheet. "The deal will give Best Buy an online digital music retail outlet as well as a subscription streaming service that has about 700,000 subscribers. That could help Best Buy to compete against retail giant Wal-Mart, which has its own online digital music offering."
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... and somehow, they managed to make it suck more (Score:5, Funny)
Good work, Best Buy. That takes effort.
Just a name... (Score:4, Interesting)
Re:Just a name... (Score:5, Funny)
Parent
Re: (Score:2, Informative)
Re:Just a name... (Score:4, Insightful)
It hard to see how Best Buy will make Napster worse because Napster started to suck the second they became a pay service -- Unlike the Geek Squad, which I heard were respectable until they became Best Buy's monkeys. Note: You'd be surprised what the "Geek" Squad can't fix!
I know because I worked for a contractor that took care of Best Buy's warranty laptop repair and we were doing things like malware removal and OS/driver reinstalls.
Parent
Re: (Score:3, Funny)
Since when was Napster a household name? It's so far off the cultural radare you couldn't hit it with a Phoenix missile.
Those crazy kids today haven't ever even used Napster. It's like talking to them about the Love Boat: they just get a blank look in their eyes, and nod accommodatingly.
As for my general thoughts on this, I'll try to be brief.
WTF?
So cool (Score:3, Funny)
LOL - totally right.
"Hey kids - remember when you used to download N'Sync off Napster? Back in 2001? When that first iPod came out with the black text screen, and Napster was synonymous with 'free' and 'rebellious?'
Good news! Napster is still cool! It's, like, 'phat' and stuff! And now we own it! So it's not free or rebellious anymore. But come on back and give us some money!"
Re: (Score:2)
I must say, I had more or less the same reacion. So, this says all things considered, they're spending about $121 million for Napster.
What, exactly, are they getting for this? Sure, Napster is a well known name, but so are Edsel and New Coke. ;-)
Does anyone have any insight into what about Napster in its current state (or any other) that actually makes any sense whatsoever to spend this kind of money?
I just don't see it.
Cheers
Re: (Score:2)
Napster has $67 million in cash and no debt. So while Best Buy is actually paying $121 million for Napster, they also get the $67 Million in cash -- that's where the $54 million fogure came from.
Re: (Score:2)
Not just the name, but the existing subscribers too. Or at least, the existing subscribers that don't care about who owns napster.
When you're talking music industry, your primary commodity is not the music, it's the people.
Hey, blue-shirt bitches! (Score:3, Funny)
That's a lot of Monster Cable money your bosses just threw away. Betcha they didn't buy a warranty, either.
Can anyone explain... (Score:5, Insightful)
Re:Can anyone explain... (Score:5, Interesting)
but the Napster brand is, at least last I knew, pretty much useless as a brand. If I am wrong, someone please correct me.
Well, give them a chance, maybe they'll start giving out free music again, just like Napster was when the brand actually meant something more than stocks and dollars changing hands.
Parent
Re:Can anyone explain... (Score:5, Insightful)
Wow, it just goes to show how out of touch geeks are.
Ask an average non-geek about napster and they will know automatically that its a music outlet much like itunes. They won't know that it sucks, they won't know much about it at all, but it is a well known brand. So yes if marketed correctly it could be very profitable.
But it will still suck
Parent
Re: (Score:2, Informative)
Re:Can anyone explain... (Score:4, Interesting)
...how this wasn't a giant waste of cash and a sign that Best Buy is run by PHBs? Honestly, I understand the reasoning (online is where music distribution is, at this point, which cuts into their bottom line), but the Napster brand is, at least last I knew, pretty much useless as a brand. If I am wrong, someone please correct me.
Napster is a well known brand - and brand awareness is valuable - most folks have no idea whether Napster is good or not - but they know teh name.
Best Buy essentially hedged its bets on the future of music distribution. WalMart is pushing to reduce the price of music it sells - as well as floor space dedicated to CD's. Wal-Mart's clout is driving the retail CD sales industry and labels are forced to play ball or risk losing significant sales volume; especially since WM really doesn't care if the carry a specific CD since it's contribution to revenue is small unlike the labels where a 10% sales drop can be very expensive. This is forcing the labels to rethink distribution, and Best Buy needs a foot in the door as the market evolves. It isn't just about online purchases but in stor kiosks and cheap memory cards / CD burns to sell a broder catalog at a much lower costs to the store - read higher margins.
Napster gives them a quick and cheap way to get into the business without screwing up the Best Buy brand (I won't touch taht with a 10 foot pole) since problems will be associated with Napster, not BB. As it grows and the bugs get worked out they can transition to a BB branded service.
Finally, it also gives them a way to move into the iPhone market *if* they can get a purchase app on the iPhone. Once they get it (Napster) up and running they are no longer trheatened by online purcases reducing CD sales as tehy have a foot in that market as well. In fact, depending on teh margins, they may prefer it.
Parent
This is interesting (Score:5, Interesting)
Re:This is interesting (Score:5, Insightful)
Parent
Re: (Score:2)
Apple isn't scared of Wal-mart which is larger, has a better IT infrastructure, and can get better deals with the media companies.
I spit coffee all over the monitor on that one.. have you EVER seen the inside of WalMart's IT? Their IT people are bungling and everything is done as cheap as possible. I had a fight with their Senior Networking specialist on how it's impossible to use Cat-5 for telephone use when trying to get a phone line into a subway store. (I so am glad I don't help with Subway IT anymo
Re:This is interesting (Score:4, Insightful)
Why is it impossible? Does POTS not run over 24 gauge twisted pair?
Parent
Re: (Score:3, Interesting)
Wal-Mart is known for their massive infrastructure at corporate, logging the sales of their product and warehouse inventory in real time (or very close). At one point my alma mater received a donation of an 82 processor system from them; Pentium Pros, presumably ousted for Xeons by 2000. I don't envy the graduate student employed to make such a beast run to where it's worth having powered on!
I'm sure there's dumbass field technicians out there that you'd have to interact with as a tenant of Walmart, but I o
Re: (Score:3, Interesting)
The few times I ever go to Wal-Mart, I don't see any benefit from these IT people, even if they aren't bungling. Instead, all I see is a lot of hassle in shopping there, from spray-paint cans that are locked away (unlike at Lowe's) and require a 30 minute wait to get a manager to open the display case, to a store that looks dingy and nasty, to horrible customers who let their 8 kids run wild all over the store, to parking lots where people who can't drive constantly run into each other.
I almost never shop
Re:This is interesting (Score:4, Informative)
When they, by using that ipod they sold you, tie you into becoming a subscriber (eventually) spending all your bucks for music, movies, tv shows and all your other media needs on *their* itunes infrastructure, making 30% on all your media, then that's way more worth for them than an ipod sale.
Are you saying that Apple is lying in their SEC filings? Because from everything they've reported to their shareholders, what you say is the opposite of true. Maybe someday the iTunes store will turn into a cash cow, but right now it's smaller and more or less break-even. As of the latest quarterly report, Apple was making at least twice as much revenue and better margins from hardware sales as store sales.
The big advantage Apple gets when you buy things from the iTunes store is that most of it only works with other iPods, so the next hardware purchase will likely also be an iPod (75%) instead of a SanDisk (15%) or one of the other bit players like Microsoft (2%).
Parent
Re: (Score:3, Interesting)
The main reason Apple is the biggest player is they figured out that the average customer would like the process to be as easy as possible.
How do you sync your iPod with your computer? 1) Plug in your iPod. There is no #2 if you accept iTunes defaults. I was one of those who bought earlier and got a Diamond Rio. Syncing up that thing to my computer took 4 or 5 steps some of them complicated.
How do you get your music on your computer? 1) Put in your CD or 1) Click on iTunes Store and browse, 2) Clic
Re: (Score:3, Insightful)
I think they may be putting together enough clout to give Apple a good scare.
Considering the number of "ipod killers" and "itunes killers" that have come and gone so far, I think that anyone at Apple who felt even a twinge of anxiety over this would be overreacting.
-jcr
Did you hear that, Steve Jobs? (Score:5, Funny)
Expect all kinds of innovation from this combined entity... Like 98.9 cent downloads. Store name that ends in "ster". More.
Re:Did you hear that, Steve Jobs? (Score:5, Funny)
Parent
Re: (Score:3, Interesting)
Here's the thing - that may be what they do.
What's the big stink nowadays in digital music distribution? DRM - especially backups. If BestBuy did this right, they could sell a "warranty" for their songs - for $49.99, you can protect say 1000 songs. That way, if they are deleted or lost or whatever, you can simply use that warranty to recover them!
While the readership here at /. might see through this obvious scam, Joe Sixpack sees it as a good deal. Consumers are already used to warranties on their physical
Stupid (Score:4, Interesting)
Most of the time, just like this time, its just ridiculous.
Re:Stupid (Score:4, Insightful)
Is walmart's digital music service good? Is is profitable?
Wal-Mart has a digital music service?
In all seriousness, I did not know this. I never see it advertised anywhere.
Parent
Re: (Score:2)
Re:Stupid (Score:5, Informative)
$9.22 albums, DRM-free MP3s, can't purchase on Firefox or on non-Windows. Not bad, if you have Windows and IE. Does browser ID-spoofing work?
Parent
Re: (Score:2, Interesting)
Not bad, if you have Windows and IE. Does browser ID-spoofing work?
No, but this does the trick. [virtualbox.org] ;)
Re: (Score:3, Informative)
Re: (Score:3, Interesting)
I looked (Score:2)
Re:I looked (Score:4, Informative)
You should look into Amazon's mp3 downloads. less than a buck a song, and totally DRM free. I get 99% of my music this way
Parent
Re: (Score:2)
Nothing left to say (Score:5, Funny)
You know, I tried hard to think of something funny here. There's just not a punch line you can add to this.
To paraphrase Hank Hill, this acquisition is the feces that is produced when shame eats too much stupidity.
Napster Squad? (Score:2)
Does that mean that the Geek Squad will be replaced by the Napster Squad? Dang, they'll have to repaint all their cars!!
Windows Guru + Napster = ? (Score:2, Funny)
Re: (Score:3, Insightful)
Windows Guru + Napster = Windows Grapster. Rhymes with how we really feel about it.
Not The Real Napster of Course (Score:5, Informative)
All the engineers from napster went off to setup their own music sites, the most high profile children of Napster are of course Snocap [snocap.com], which was setup by Shawn after napster 1.0 died and later got acquired by imeem.com [imeem.com] which was also started by napster engineers and has become the most popular web2.0 music site (over twice the users of last.fm).
There's also finetune [finetune.com] and a few other small music projects that can trace some lineage to the original napster. Every single one of these descendants from napster are a whole lot more interesting and innovative than what the Napster brand ever did.
Re: (Score:2)
Presumably you're talking about the later Napster efforts, right? The original Napster may not have been especially ethical, but there's no question that it was revolutionary and industry-shaking.
Re: (Score:2)
Great... (Score:2, Funny)
Re: (Score:3, Insightful)
Just like with real extended warranties - mostly hogwash and lies.
I'm sure this will work out for them. (Score:2)
I'm sure this will work out perfectly for them. I mean, take a look up here at Canada. Best Buy Canada is owned by Future Shop. And Future Shop opened their own digital music download store, too. It's called Bonfire, and...
Wait, what's that? Oh, okay, it wasn't really their own download store. It was just Puretracks with a custom skin on it. In any case, it blazed their trail into the future of music downloads and...
Huh? Oh. Okay, it turns out Bonfire [puretracks.com] was a massive flop and was shut down this year.
Well, in
my dream (Score:4, Funny)
They could have just... (Score:3, Funny)
Suckers!!!!