Rhapsody will acquire Napster from Best Buy and perhaps that will – once and for all – kill off the most notorious company name in online music. I for one am glad to see it go. Napster was launched in 1999 by Shawn Fanning and Sean Parker to promote illegal online sharing of music in the form of mp3’s. It was shut down in 2001, declared bankruptcy in 2002, was reborn as a commercial venture in 2003 and purchased by Best Buy in 2008. I always thought that was one of the worst decisions to buy a brand that a company ever made.
Now Rhapsody, in an effort to stay alive and compete with newer on-demand services like Spotify, will migrate Napster subscribers over to the Rhapsody platform where they will enjoy subscription based on-demand streaming, along with the ability to build playlists for offline listening, a feature that Rhapsody introduced earlier this year. Reportedly, Napster subscribers who were paying a cheaper, $5 a month fee will have to upgrade to Rhapsody’s $10 a month subscriber fee.
Rhapsody has 800,000 subscribers, about 15 million songs, and has been in business for about ten years. While they’re not huge, they are the largest on-demand subscription service. Best Buy paid $122 million for Napster in 2008 and will get a minority stake in Rhapsody in the transaction.
Napster openly and defiantly promoted illegal music sharing and caused a lot of animosity between labels and services, not to mention contributing to the “music is free on the Internet” mentality that is still pervasive today. There’s a real satisfaction in seeing one of the oldest names in online music finally put the brazen bull that caused so much damage out to pasture..
Teens are streaming more music and filesharing less, according to a newly released study by The Leading Question/Music Ally of UK music fans. New research shows that illegal filesharing is being replaced by legal streaming activity as more and more teens are streaming and sharing playlists online.
What’s more, this trend to increased streaming is leading to increased songs being purchased. There are now more UK music fans regularly buying single track downloads(19%) than file-sharing single tracks (17%) each month according to the new study.
The results of this report suggest that – at least in the UK – licensed streaming services that provide easy access to new music are replacing filesharing activity among teens. The best way to beat piracy is to create great new licensed services that are easier and more fun to use – like streaming services such as Spotify (not currently available to US listeners, but coming later this year) or services that offer unlimited mP3 downloads and streams, such as a new service recently announced by Virgin.
This is news that should be of interest to online stations and music labels here in the US as well. As mobile platforms for Internet radio expand, more and more teens are listening to Internet radio. Sites that enable music sampling and sharing are particularly appealing as they mimic the kind of behavior that drove listeners to share music illegally. What’s more, the study also shows that once they share and sample music on a stream, they’re likely to purchase it. That’s a win win for streaming services and record companies.