Best Buy Purchases Napster...Remember Napster?

So, big box giant buys Napster. Interesting. Napster WAS huge but now, according to ReadWriteWeb, boasts just 700,000 paid subs. A paid sub entitled users to all you can eat music for as long as you were a subscriber. But no ownership.

So 700,000 payers. Nothing to sneeze at, but as I do the math that's $172.85 per subscriber. Not what you'd call a fire sale price.

Recall that millions once used Napster when it was a free way to steal music by the bucketful. But then a little thing called the law shut them down. Napster was resurrected as a paid subscriber service, with a predictably smaller footprint. Because, as I say all too often, if you think the key to business success is giving consumers what they want online, you'll have a problem. because what they WANT is everything, free. Now.

But the current sub base is not actually why BB bought it. They see huge potential for the mobile side of Napster. Given how many phones BB sells, perhaps its a good bet.

Still seems like a lot of green to me.

Says Read Write Web:

It's All About Mobile

Best Buy must think that it can push Napster to be a profitable part of its company, but over the last few years, the company never turned a profit. Best Buy, of course, does have a considerable amount of marketing power both in its ubiquitous big-box stores, as well as through TV and print advertising. Judging from the wording of the press release, it seems Best Buy is mostly interested in Napster's mobile business. In the mobile business, Apple doesn't have the dominant market position it has in the regular MP3 player market, so by positioning Napster there, Best Buy might be able to carve out a lucrative niche for the service.

Bundles

Chances are that Best Buy will start bundling Napster with anything from toaster ovens to overpriced Monster cables in the coming months. The holiday season, after all, is right around the corner and if Best Buy still wants to get some value out of the acquisition this year, they will have to act fast.

Thanks for reading, and don't forget to write.