US electricals retailer Best Buy has purchased Napster for GBP67.5 million as part of a strategy to expand its online presence and reach new customers. By enhancing its digital music offer, Best Buy can exploit the synergies with partner Carphone Warehouse to take advantage of the growth potential of the mobile music download market, while mounting a serious challenge to the supremacy of iTunes.
Both Amazon and Google are reported to be considering launching music download services. The arrival of these influential players will be a significant step for the sector, whose growth has so far been stunted by the non-compatibility of existing legal download sites. They would also provide a viable alternative to Apple's dominant digital offer.
US music & video retailer Tower Records has filed for Chapter 11 bankruptcy protection for the second time in two years. MTS, the owner of Tower Records, has estimated debts of $89 million and continued competition from grocers and the internet makes the chain's future look bleak.
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