Tag Archives: Napster

Mix Napster & Circuit City = Circuit City + Napster’s Digital Music Service

Posted on April 22, 2007 by Amit Chowdhry

Napster / Circuit City LogosThis last Friday, April 20 Circuit City Stores Inc. (NYSE: CC) and Napster Inc. (NASDAQ: NAPS) have announced that they’re teaming up in the launching of a new online music service called: Circuit City + Napster.  The service will be powered by Napster subscription services and will be available starting April 29. 

This partnership between the electronic store and the digital music service emulates a similar deal struck between Best Buy and RealNetworks’ Rhapsody player. 

What Napster gets out of the deal is that they get a new marketplace.  Circuit City is an established and well-known brand that consumers are comfortable with.  Circuit City will be able to market itself to Napster’s 566,000 paid subscribers.

“We are delighted to create this new alliance with Circuit City which is one of the top destinations in the U.S. to learn about exciting, new digital entertainment products,” stated Chris Gorog, the chairman/CEO of Napster. “Circuit City’s strength both in consumer electronics and as a music retailer should be an ideal environment to introduce Napster’s industry leading music subscription service.”

For more information, refer to the press release.

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AOL Sells 350,000 Subscribers to Napster for $15 Million

Posted on January 13, 2007 by Amit Chowdhry

AOL-NapsterYesterday, AOL had agreed to sell AOL Music Now to Napster for $15 million.  Napster would absorb AOL Music Now’s 350,000 subscriber client base.  After that, Napster would have 916,000 subscribers.  Before the transaction, Napster was worth about $186 million, but now with the value-added 350,000 subscribers, the valuation is expected to jump by another $100 million.

“AOL is treating this like a nonessential business,” stated Fred Moran, a Stanford Group analyst.  After the announcement was made, Napster, Inc. (NASDAQ: NAPS) shares rose by 30 cents, making Napster $4.12 per share.  AOL will continue to maintain AOL Music.

It was in October 2005 when AOL had bought Music Now for a suspected amount of $10-15 million from Circuit City.  Now AOL’s music services are owned by RealNetworks.  RealNetworks is known for streaming subscription music player, Rhapsody and WinAmp competitor, RealPlayer.

Napster will also be promoted on AOL Music pages and if certain subscription targets are made by Napster, AOL would receive additional payments.

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