In its second-largest acquisition, Amazon buys the company for $970 million.
Napster and parent Roxio have teamed with Imation and Case Logic to sell through Target stores and Target.com a complete system for downloading, editing, playing and storing digital music from Napster.com.
Napster does it again. The one-time brat of the Internet-linking (mostly) college students to swap music for free in defiance of the music industry’s wishes to charge for its product-is quickly building on a retail strategy that it started rolling out at the end last year (Internet Retailer, January 2004, p. 6).
Hard on the heels of its announcement that it would sell Napster cards in retail locations, Napster, which started charging for music last year, and parent Roxio Inc. have teamed with Imation and Case Logic to sell through Target stores and Target.com a complete system for downloading, editing, playing and storing digital music from Napster.com. Roxio makes and sells consumer software for creating and editing digital music and videos.
Target, a retailer with a strong multi-channel presence and a reputation for value among discount department stores, presented the ideal channel partner, Napster officials said. “Target was a great place to start this, because they’re good at building brands and reaching large amounts of consumers with products consumers want, and because they’re also online,” Larry Linietsky, Napster’s senior vice president of business development and analysis, said in a conference call with reporters.
“This is an important first step in bringing the richest music experience to a mass audience and Target is the ideal venue to reach customers,” added Mike Bebel, Napster president and COO.
Steve Eastman, vice president of merchandising for Target, said the arrangement offers an easy way for Target to provide store and online customers the means to get outfitted for downloading music from Napster.com.
Jim Okamura, analyst who specializes in multi-channel retailing at consultants J.C. Williams Group, says Napster’s packaged-products approach may be a good way to leverage its brand while reintroducing Napster to the market. Although offering Napster-branded items like CD storage containers won’t necessarily add a lot of value for many shoppers, he says, selling a package with reputable partners is a good way to test how much Napster can build on its brand equity. “There’s a lot of validity in what they’re trying to do,” he says.
Target will display the digital music products in an end-cap in its consumer electronics section in all of its more than 1,100 stores nationwide. The deal calls for Target to sell pre-paid Napster download cards, a Napster 2.0 and Roxio software package for downloading music and burning it to CDs, blank Napster-brand CDs from Imation, and Napster-brand CD storage cases from Case Logic.
Napster’s Target deal follows another bold move it made in December to sell its gift cards through some 20,000 retail stores, including national consumer electronics chains Best Buy Co. Inc. and Radio Shack Corp.
But Target won’t be the final chapter in Napster’s evolution from a free file-sharing service to a retailing partner with leading merchants, executives say. Linietsky said Napster is discussing similar arrangements with other retailers. “We hope to duplicate that experience wherever we can,” he said.
In a separate deal, Napster and Digital 5 Inc. have partnered to launch StreamRite QoS and Universal Plug and Play software that lets users of Napster’s Premium music service access digital music through connected DVD players and other electronics devices, supporting the playing of music throughout a home on multiple devices.