Rhapsody Acquires Napster International Service in Germany, U.K.

Jan. 26 (Bloomberg) -- Rhapsody International Inc., the largest U.S. music-streaming service, bought Napster Inc.’s businesses in Germany and the U.K. as it seeks to double its more than 1 million subscribers.

The acquisition, which includes Napster’s subscriber base in the two countries, “gives us an ideal entry to the European market,” Rhapsody President Jon Irwin said today in a statement. The Seattle-based company didn’t disclose a price.

The expansion in Europe intensifies competition for London-based Spotify Ltd., which has about 2.5 million paying users worldwide. Rhapsody is talking with mobile-phone companies globally about agreements like the one it has with MetroPCS Communications Inc., which bundles music with prepaid text and data plans, Irwin said in December. Closely held Rhapsody, spun off from RealNetworks Inc. in 2010, bought Napster’s U.S. business from Best Buy Co. last year.

The company will use the Napster brand in Germany and Britain because it’s widely recognized, it said in the statement. Napster International 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 in the statement.

Rhapsody, started in 2001, charges monthly fees to subscribers, while some competitors offer free or advertising-supported services. Napster subscribers in Europe will be moved to Rhapsody’s infrastructure in March, the company said.

To contact the reporter on this story: David Risser in London at drisser@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net