Rhapsody To Acquire Streaming Music Competitor Napster

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On-demand music service Rhapsody will acquire competitor Napster in an effort to expand its user base, the companies have announced. Under the terms of the agreement, Rhapsody will acquire all Napster subscribers and certain other assets. Meanwhile, Best Buy, Napster’s current owner, will receive a minority stake in Rhapsody.

The “other assets” that will move over to Rhapsody include Napster’s IP portfolio. However, no mention of Napster’s label contracts or deals were made in today’s announcement. Currently, Napster has a streaming music catalog of over 15 million songs, as well as apps for the desktop, mobile and TVs. The software also provides access to streaming music radio stations, thousands of playlists, offline music, charts and more.

Rhapsody, on the other hand, boasts a catalog of 13 million songs (according to the announcement – the website says 12 million), meaning Napster subscribers will be losing access to a good number of tracks in the transition. But Rhapsody’s other offerings, including cross-platform apps, playlists and a radio feature, are similar to what Napster now includes.

The acquisition comes at a time when newer startups like Spotify, MOG and Rdio are stealing the spotlight from older brands like Napster and Rhapsody. A clue that Napster was on its way out came last week when Rhapsody was listed among the services receiving Facebook Music integration while Napster was not.

The stock-based deal will close on November 30th, says the report. Terms were not disclosed. Rhapsody has 800,000 subscribers, reportedly double that of Napster.