Napster Buys AOL Music?

Being a passionate music fan, I pretty much lap up any industry news that’s devoid of keywords like “bling”, “pop princess”, “Beyonce”. You know, you gotta have the firewall up at least a bit. But there are those moments when there are things going on which have little or nothing to do with the audio, and everything to do with the audio, all at the same time. Such is the case with the news of AOL Music’s purchase by Napster. Yep. Napster.

I’m sure you’ve heard about this already. It’s been Techcrunched. It’s gotten plenty of press - however understated that press might be. And sure, there’s plenty of reason to look over this acquisition without much fancy or care. But save a little room for a touch of anger, as this could change AOL’s game complete. And yes, AOL still has game. Shocked to hear it? I’m even more surprised at myself for saying so. But it’s true.

But why should you be angry, you ask? Well, for one, AOL has changed. It offers some pretty neat services – free ones, even – that rival just about any other portal large or small. They allow you the option to browse and listen to over a dozen popular XM satellite radio stationsfor as long as you wish, and some of those are quite attractive streams. (I’m currently enamored with XM Café.) They also offer a vast variety of music videos, and despite the mistaken hearsay, most of AOL is open to Windows users as well as Mac users. This isn’t so for movie downloads, but things are moving in that direction.

So why does Napster want it? Who knows. Maybe they want the traffic AOL Music’s been getting lately. The stats say they’ll (Napster) be taking on 350,000 new subscribers and getting a lot of promotion on AOL, all for US$15 million. That doesn’t seem like a lot of cash at all, and Michael Arrington says Napster has quite the war chest, but when an “unprofitable” business buys an operation that’s part of one of the Big Four of US engines - one that’s just starting to climb out of a deep, deep hole - you wonder where the sane of Napster has gone? And, well, where did AOL’s sanity go in relinquishing AOL Music? Wasn’t it one of its more rosy-looking entities?

Maybe AOL Music won’t change that much, but my impression from the buyout is that it will change. AOL Music has subscribers, and Napster is going to take them as their own, so either AOL Music will shrink or get a brand spanking new sign on the door. Couple this with the fact that Napster itself is/was reportedly up for sale back in September after news that it had hired an investment bank to explore options reached the media and the blogosphere, and there’s more than enough reason to worry, and possibly throw a little temper tantrum.

Within the moment of time between then and now, Napster has grown, but barely so, adding a little less than 50k subscribers to its $10-per-month all-you-can-eat system. As far as bargains go, Napster offers one of the better ones out there, but it’s still lagging behind most other services. Between September of 2006 and now, they’ve gained nothing in terms of income and lost more than $11 million. Yikes is right.

So who knows what’s going to happen to AOL Music. The additional subscribers Napster gathers from the acquisition could signal a new day for the ailing music service, or it could be the first big sign of the end of both operations. And that would really, pardon my French, suck. AOL Music, despite the company’s past problems, has really turned some noteworthy corners in the past few seasons. It used to be losing steam like no tomorrow, and as of recent it’s been picking up the slack like its livelihood depended on it. More of AOL is going free to attract more and more visitors, and the move to do so seems to be working in its favor. Who’da think it? Hopefully, hopefully, Napster’s move isn’t going to screw that up. Otherwise I may have to pay to listen to XM Café from now on. And struggling freelancers shouldn’t have to pay for such things.

What’s that? Oh, no. No way. Hard working? Me? Please.