Best Buy Coughs Up $54 Million For Napster

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."

Can anyone explain...

[Darundal]

...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.

Re:Stupid

[oahazmatt]

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.

Re:Can anyone explain...

[Anonymous Coward]

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

Re:This is interesting

[UnknowingFool]

Seriously do you think Apple is scared of Best Buy? Apple isn't scared of Wal-mart which is larger, has a better IT infrastructure, and can get better deals with the media companies. The main reason Apple isn't scared is that iTunes Store exists only to sell more iPods and AppleTVs. It makes some profit but the company's future isn't bet on it. If iTunes Store were to shut down tomorrow due, it really would not hurt Apple. The problem for Best Buy leveraging downloads to sell mp3 players is that they offer nothing special and are really late to the game. Which DRM would they use? PlaysForSure? We all saw what happened to other MS partners. That would also eliminate their iPod customers as well. No DRM. They have to compete with Amazon and Apple with 700K singles compared to millions for each for Amazon and Apple. Would their integration be as easy to use as Apple or even MS Zune or would it be like every other player out there?

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Windows Guru + Napster = ?

[UnknowingFool]

Easy.
Windows Guru + Napster = Windows Grapster. Rhymes with how we really feel about it.

Re:This is interesting

[Chrutil]

iTunes Store exists only to sell more iPods and AppleTVs.

Actually I think the long term plan for apple is the reverse.
When you buy an ipod they make like 20 bucks (or whatever) on the deal, with all the costs involved in making the hardware.
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.

^C

Re:Great...

[GIL_Dude]

You know what? I bet they do. They might not call if "Extended Warranty". They'll probably call it "Download Protection" and sell it with lines like: "What if your hard drive crashes? Do you want to have to buy all that music again?"

Just like with real extended warranties - mostly hogwash and lies.

Re:This is interesting

[ajlitt]

Why is it impossible? Does POTS not run over 24 gauge twisted pair?

Napster has a monetary value?

[British]

Here's what I don't get: Napster started as a free app to download pirated music. Now after many changes, it's being sold for millions of dollars. What are they exactly bringing to the table? Just the subscribers?

The sale of myspace for an obscene amount of money makes more sense than this(eyes to see ads). Still not quite getting the Napster sale.

Then again, this is the same world that the "I'm rich!" iPhone app sold for a while.

Re:Just a name...

[Ethanol-fueled]

Nobody did a good job of making money with the Napster name after Napster wasn't free anymore ;)

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.