Today, after 12 years, the company that sparked a revolution in how we purchase music online, is no longer.
Rhapsody, the largest on-demand music service in the United States, bought its assets, intellectual property and subscribers last month from parent company Best Buy for an undisclosed sum and a minority stake.
The acquisition nearly doubles Rhapsody’s subscriber base. They had 800,000 subscribers in July 2011 and at the time of the purchase, Napster had 700,000 subscribers.
Napster started in 1999 and almost immediately were being sued for distributing music for copyright infringement. It took two years for the service to be shut down by court order, under the Digital Millennium Copyright Act (DMCA). Napster finally declared itself bankrupt in 2002 and sold its assets to German media firm Bertelsmann for $85 million. However an American bankruptcy judge blocked the sale and forced Napster to liquidate its assets, and it was sold to Roxio who in turn sold it to Best Buy in 2008 for $121 million.
Interestingly, when Napster was shut down, Rhapsody was started and will be celebrating their 10-year anniversary this Saturday (December 3rd). There’s also talk there might be a Napster documentary in play.