Oct. 3, 2011 at 3:30 PM ET
In the midst of vast sea-changes in the music industry, two on-demand music services are hooking up.
Rhapsody said Monday that it is buying Napster (which is owned by Best Buy Corp.) for an undisclosed amount. Rhapsody gets Napster subscribers and some other assets, thereby expanding its market share in an industry which seems to sprout a new entry every other day. Best Buy, in turn, gets a minority stake in Rhapsody.
Apple's iTunes is the Big Kahuna in the industry, which has grown as fewer people buy CDs and more of them listen to music on smart phones, pads and other devices.
"This is a 'go big or go home' business, so our focus is on sustainably growing the company," Rhapsody president Jon Irwin said in a statement.
Napster began life in 1999 as the brain-child of an 18-year-old college student, Shawn Fanning, who created a program that allowed people to swap music files. The idea took off, but ran afoul of the music industry which sued Napster for copyright infringement. The suit led to Napster being shut down. Best Buy later bought Napster.