Best Buy Co Inc announced plans to purchase Napster Inc for $121 million in cash. The proposed acquisition will allow the company to compete with the Apple iTunes service and its iPod music players.
Best Buy and Napster both offer digital music subscription services. However, neither have mounted much of a challenge to rival Apple. Apple iTunes holds more than 70 percent of the digital music market share in the United States.
“This is a very natural and appropriate time for Napster to lever up our position in the industry with a strategic bear hug from such a powerful partner,” Napster Chief Executive Chris Gorog said in a statement.
Best Buy first offered its digital music service in 2006. The company teamed up with RealNetworks Inc and SanDisk Corp to create a compatible media player.
Napster has a better chance competing against iTunes by combining its resources with Best Buy. The two companies plan to offer new services over an array of devices to reach new music customers.