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Rhapsody takes battle to Spotify by buying Napster’s European operation

US digital music service challenges rival with push in UK and Germany using long-established brand name

Rhapsody has acquired Napster’s European operation, marking the music streaming service’s first move beyond the US market and kicking off a battle with Spotify.

The US service, which has only been available to American customers for the past 11 years, has reached a deal to acquire Napster International’s subscription music business.

The deal, for an undisclosed sum, will see Rhapsody launch in the UK and Germany under the Napster brand name and take the fight to the increasingly popular Spotify.

Rhapsody, which acquired and drastically restructured Napster’s US business last October, intends to keep all the company’s staff and migrate users to its infrastructure in March.

The Napster brand name will be retained in UK and Germany because it is better known in Europe than Rhapsody.

“The acquisition of Napster and its subscriber base in the UK and Germany gives us an ideal entry to the European market,” said the Rhapsody president, Jon Irwin. “Through the benefit of scale, the strength of our editorial programming, and strategic partnerships, we can now bring the Napster service to even more consumers on a variety of platforms.”

Rhapsody launched in the US in 2001 and claims to be the largest subscription music service in the US with more than 1 million paying customers.

However, it now faces serious competition from Spotify, which is well established in Europe and launched in the US in July. In November, Spotify claimed more than 2.5 million paying subscribers.

Spotify is the biggest subscription service in the UK, while Napster ranks second. Spotify has not launched in Germany, although it is thought to have plans to go live very soon, while Napster is already well established.

“This is the perfect time to extend our borders both geographically and technologically,” said Irwin. “Consumer demand for subscription music has never been greater. There is a lot of room for growth in this market and I firmly believe that 2012 is going to be our biggest year yet.”

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