Napster is proving to have more lives than a cat. Bertelsmann, the German media conglomerate, will pay off Napster's creditors and keep it alive for the near future. Only three days after Napster CEO Konrad Hilbers and Shawn Fanning, Napster's creator, announced they were leaving the project, the deal which caused those resignations, actually came through.
According to the deal Bertelsmann will pay US$8 million to Napster's creditors and will acquire the ailing company's assets allowing Napster to file for Chapter 11 bankruptcy protection.
We are very pleased to have reached an agreement with Napster's board of directors, Joel Klein, CEO of Bertelsmann, the services and legal arm of Bertelsmann AG, said in a statement.
We're happy to see Napster move forward with Konrad Hilbers at the helm, Klein continued. We are very committed to providing artists the best possible distribution opportunities for their work, and to provide consumers more choice and control.
The Napster - Bertelsmann love affair has gone through many twists and turns, when Bertelsmann first announced they would attempt to buy Napster in October 2000, the world was stunned since BMG Entertainment, a record company owned by Bertelsmann, was in the process of suing the file-swapping company.
This final deal is a real bargain for Bertelsmann since only a week ago they had offered US$16 million to buy Napster. A lack of agreement among Napster board members however, caused that deal to be rejected and the resignations of Konrad Hilbers and Shawn Fanning. Those resignations may have been used as a means of pressure in order for the next Bertelsmann offer to be accepted.
The whole story seems to prove that Bertlesmann believe that the future of the record business relies on offering a reliable, subscription based, online music service.