Online Music Provider Ties with UK High Street Retailer

06 May 2004

Napster, the US online music provider, is using high street retailer Dixons as the springboard for its entry into the UK market.

Under the deal Dixons and its subsidiaries, Currys, PC World and The Link, will install Napster on their own-brand PC's this summer.

The agreement which covers more than 1,000 shops means Dixons will also stock a range of Napster branded products.

Napster president Brad Duea said there were two factors why he had chosen Dixons as partner. First, the company had been a driving force behind online services, namely Freeserve. And second, Dixons, did not sell music products.

Napster clearly regards the UK market as the testbed for other European markets such as France, Italy, Scandinavia and Eastern Europe where Dixons has outlets.

Napster which has just posted its full year results said revenues for the quarter to the end of March had virtually doubled to $6.1million (€5.0m; £3.4m). It is also predicting revenues of between $30-$40m for the next financial year.

Analysts say the UK, the world's third biggest music market after Japan was the obvious choice for Napster's first international foray. The company is also poised to launch in Canada.

At one stage the company infuriated the music industry when more than 60 million people a day were using it for illegal downloads.

It was relaunched as a legitimate business last October by software company Roxio and currently sells 300,000 tracks a week for $0.99.

Data sourced from: Financial Times; additional content by WARC staff.