Rhapsody Replaces Napster in Europe
Rhapsody International Inc. bought Napster Inc.’s businesses in Germany and the U.K. in hopes to double its already 1 million plus subscribers. Napster’s current customers will be moved to Rhapsody in March. The extension into Europe will become the first competition for London-based Spotify Ltd. The price has not been disclosed.
Rhapsody is also in talks with mobile phone companies about agreements that bundle music with text and data plans, like the one they already have with MetroPCS Communications Inc. (NYSE:PCS). The company will use the Napster brand in Germany and Britain because it’s already known there and all employees will keep their jobs.
“Rhapsody has played a pivotal role defining streaming music services, which are essential to the future of the entire industry,” Rob Wells, president of global digital business of Universal Music Group, said.
Rhapsody branched off of RealNetworks Inc. (NASDAQ:RNWK) in 2010 and bought Napster’s U.S. business from Best Buy Co. (NYSE:BBY) last year. It is also the largest U.S. music streaming service. Rhapsody launched in 2001 and charges monthly fees to subscribers.
Here’s how the shares are reacting to the news:
MetroPCS Communications, Inc. (NYSE:PCS): PCS shares recently traded at $8.67, down $0.15, or 1.7%. They have traded in a 52-week range of $7.51 to $18.79. Volume today was 1,050,476 shares versus a 3-month average volume of 4,724,220 shares. The company’s trailing P/E is 14.17, while trailing earnings are $0.61 per share.
RealNetworks Inc. (NASDAQ:RNWK): RNWK shares recently traded at $9.70, up $2.35, or 31.97%. They have traded in a 52-week range of $6.81 to $16.44. Volume today was 658,184 shares versus a 3-month average volume of 115,832 shares. The company’s trailing earnings are $-0.63 per share.
Best Buy Co. Inc. (NYSE:BBY): BBY shares recently traded at $25.63, down $0.08, or 0.31%. They have traded in a 52-week range of $21.79 to $35.45. Volume today was 1,398,813 shares versus a 3-month average volume of 6,593,120 shares. The company’s trailing P/E is 8.84, while trailing earnings are $2.90 per share.