The subscription music wars are heating up now that Spotify is stateside.Today, Rhapsody said it would buy Napster from Best Buy in a bid to increase its userbase.
Rhapsody claims 800,000 paying subscribers, making it the top paid music service in the U.S. A spokesperson calls Napster number two “by a big margin” and says that the deal will “substantially increase” Rhapsody’s user base.
Napster was estimated to have about 700,000 subscribers when Best Buy bought it in 2008, but its numbers were declining fairly rapidly at that point.
The companies would not disclose financial details of the transaction, but Rhapsody is acquiring all of Napster’s subscribers and IP, and in exchange Best Buy will take a minority stake in Rhapsody. The deal is expected to close by the end of November.
The deal will place even greater pressure on smaller competitors like Rdio and MOG, but it might not be enough to stop the Spotify juggernaut.
The service has only been available in the U.S. since mid-July, and CEO Daniel Ek recently said that it had added 400,000 paying users since that time, for a total of 2 million subscribers worldwide. Spotify was also featured prominently at Facebook’s F8 conference a couple weeks ago, and has close ties with the huge social network — last week, for instance, Spotify began requiring all new subscribers to have a Facebook address.