Telefonica partners with Rhapsody to expand Napster

Through the deal, Napster will replace Telefonica's existing music service in Latin America

Technology trends and news by Steven Loeb
October 16, 2013
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The music streaming space is ultra competitive right now, with everyone and their mother trying to get a piece of the pie. It's probably a safe bet to say that Spotify is leading the pack at the moment, but one company just struck a deal that might just give it a leg up over the rest of the competition.

U.S. music company Rhapsody, which owns Napster, has entered into a major strategic partnership with Telefonica, it was announced on Wednesday. The deal will bring Napster to the Latin American marketplace for the first time and will, ultimately, allow Telefonica of offer the Napster service to its more than 316 million customers around the world.

Napster will be getting hundreds of thousands of customers immediately: as, through the deal, Napster will be replacing Telefonica's existing streaming music service, Sonora, which is one of the largest subscription music services in Latin America.

Beginning on November 1st, all existing Sonora users, starting with those in Brazil, will be given the opportunity to switch to the Napster music service for the same price, or less, than they currently pay.

Napster will be gaining a larger foothold in the future, as Telefonica also revealed that it will begin pre-loading Napster on Firefox phones in Brazil, and three other counties in Latin America, in the next quarter,

In order to solidify its place in the new market, Rhapsody announced that is going to establishing an office in Sao Paulo to support "future commercial launches for Napster throughout Latin America."

For Rhapsody, this deal obviously boosts the company's prospects by giving it access to a slew of new customers. For Telefonica, it gives the company a boost in the all-important music streaming space.

"Whether through the O2 Arenas or services such as Sonora, we have long believed that music is an important way of engaging with customers," Stephen Shurrock, CEO of New Business Ventures at Telefonica Digital, said in a statement.

"As demand for streaming music services takes off, our Rhapsody partnership will allow us to deliver a compelling music proposition to our customers, leveraging Napster's heritage, brand and strong position in this market."

Through this deal, it was also revealed Telefonica will be gaining an equity stake in Rhapsody, though there was no indication of how large that investment was.

About Rhapsody 

Rhapsody is one of the older music sites, having been founded in 2001, but has been overshadowed in recent years by Spotify. The company currently offers its customers access to over 20 million song.

The company bought Napster's European properties in January of 2012, following the purchase of its U.S. properties in October of 2011. 

Rhapsody is not the only music streaming company to recently begin looking to expand overseas: its nemesis Spotify has also been on an expansion tear lately.

In April, the company made its first moves into Asia by launching in three countries on the continent: Hong Kong, Malaysia, and Singapore. At the same time, It also launched in five other countries at the same time: Mexico, Estonia, Latvia, Lithuania, and Iceland.

Most recently it announced that it is launching in Taiwan, Greece, Turkey and, most ominously for Rhapsody, Argentina.

Looks like the competition for the Latin American market is already heating up.

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