RealTime IT News

A Deal in the Works for Napster?

A deal may reportedly be in the works that would allow music-swapping service Napster to survive. According to a report by Inside, two unidentified ISPs -- one a western communications giant and one a brand-name "pure" ISP -- have been separately negotiating to buy the company for months.

According to the report, such a deal would be a win for everyone involved (aside from Napster's users who would probably have to start paying for something they now get for free).

An ISP which buys Napster would gain a compelling service only available to its subscribers. With an estimated 32 million Napster users (many of whom are presumably loyal to the service), the ISP owning Napster could stand to attract hundreds of thousands to millions of new subscribers, which could amount to more than a billion dollars in annual fees.

Several plans for how such a service would work have been floated. In all likelihood, there would be some sort of monthly charge tacked onto the monthly ISP bill. Since the buyer would be more interested in increasing revenue through growth of its subscriber base, any profits from music-swapping could be passed on to the labels and music publishers which have been seeking Napster's demise.

Reportedly, Napster's price is in the realm of $500 million. But that price may have to come down before a potential buyer will seriously consider taking the plunge, especially considering the company's precarious legal position.