Napster, the music-industry scourge that blazed a trail that led to modern digital music services, is about to head off into its final good night.
On Thursday, Napster will be merged officially with Rhapsody, the largest on-demand music service in the U.S.
Rhapsody announced last month that it had struck a deal with Best Buy to purchase Napster subscribers and other assets in a bid to boost its user base. As part of the deal, Best Buy — which acquired Napster in 2008 for $121 million — will receive a minority stake in Rhapsody.
Financial terms of the Rhapsody deal were not disclosed, but the merger is expected to be finalized on Wednesday.
It’s the end of a tumultuous road for Napster, a controversial but iconic site that has blinked in and out of existence over the past decade.
Napster launched in 1999 as a peer-to-peer file-sharing service tailored for swapping music files. It quickly became a hotbed of copyright infringement, and it survived only two years before it was shut down by court order. During that time, the Recording Industry Association of America and other trade groups railed against Napster — and filed hundreds of lawsuits against users who downloaded content illegally.
A lawsuit eventually took down Napster, but “the Napster effect” rippled through the music industry even after the file-sharing ceased.
The fracas highlighted a supply-and-demand disconnect: Consumers were fed up with paying $20 for a CD when what they really wanted was only one or two songs. They also demanded an easy, inexpensive way to get digital tracks — and made clear that if the music industry wouldn’t provide one, they’d go the illegal route.
It took several more years to cobble together a solution that worked for both sides. Shaken by Napster, the music industry grudgingly accepted that it had to change — and out of the ashes came services like Apple’s 99-cent-a-song iTunes.
It also cleared the way for streaming services like Rhapsody, which lets users download as many songs as they like for $10 a month. Founded in 2001, Rhapsody now has around 800,000 subscribers.
At a tech conference in October, Napster co-founded Sean Parker reflected on the massive changes the music industry has undergone in the 12 years since Napster launched. He sees the field as having finally come full circle.
“Spotify is an attempt to finish what I started at Napster,” said Parker, who is a Spotify investor and sits on the company’s board.
Article originally appeared on CNN (http://www.cnn.com) and was written by Julianne Pepitone.
In an interview with THR, CEO Peter Edge and COO Tom Corson explain why it was time to “retire those brands” and how the artists reacted.
Amid some big changes in the music industry, new RCA Records CEO Peter Edge and longtime colleague Tom Corson, who was promoted to president and COO in August, have officially shuttered historic labels Arista and Jive. J Records, launched by Clive Davis in 2000 as an “instant major,” will also see its artists bequeathed to RCA.
“The path we’ve taken is to refresh RCA, so we’re going to retire those brands,” Corson tells The Hollywood Reporter in a new interview. “There may be a reason down the line to bring them back, but it’s a clean slate here.”
Jive Records, run by Barry Weiss for nearly 20 years, was home to multi-platinum pop stars Britney Spears andJustin Timberlake. Arista was founded in 1974 also by Davis, who signed Whitney Houston, Aretha Franklin and Barry Manilow to the label. In recent years, it saw releases by Usher and Pink. All artists will now fall under the RCA Records banner.
In the digital age, one might think these closures mean there is little value, awareness or loyalty to a label by name, but the execs insist it’s quite the opposite. “The concept is that there is value in branding RCA and not having it confused or diluted by other labels,” says Corson. “The artists have all been supportive. We didn’t make this move without consulting our artists, and we haven’t had any push-back. Frankly, they’re the brand. We’re defined by our artists.”
The move follows a round of layoffs in which dozens of staffers were let go, including longtime executives Richard Palmese (J’s evp of promotion, who had been Davis’ righthand man for three decades), Tom Carraba and Peter Thea (both Jive evps) and roster cuts made (American Idol season 9 winner Lee DeWyze was a casualty), all in an effort to significantly downsize the label. “We’ve learned to work with less and hopefully accomplish the same or more,” Corson adds. “But by definition, the business has shrunk – the staffing has shrunk, our rosters are smaller. But we’re still profitable.”
Under the Sony Music umbrella, now headed by Doug Morris, RCA was founded in 1929 and is the second-oldest label in the U.S. (behind fellow Sony property Columbia). Together, the labels have boosted their parent company’s market share to comfortably place it in the No. 2 spot, behind Universal Music, Morris’ former employer and Weiss’ current home, where he is Chairman & CEO of Island Def Jam and Universal Motown Republic Group.
Says RCA’s Edge of his label’s place in the greater Sony picture: “Doug is intent on making A&R the focus of RCA and the new focus of Sony Music. The big initiative here is to spend more money on artist development, making more records and making better records and less on all of the other stuff. I happen to agree with him.”
Article originally appeared on Hollywood Reporter (http://www.hollywoodreporter.com) and was written by Shirley Halperin.