Napster, XM tune in for deal

Duo to offer auds sat radio, online music combo

Giving it a potential boost in competition with market leader Apple iTunes, Napster has signed a deal with XM to create a combined service giving subscribers access to both satellite radio and online music.

Dubbed “XM + Napster,” offering will feature XM’s 150-plus channels and Napster’s 1 million-plus songs for a single monthly fee expected to be less than the $22.90 cost of purchasing each separately.

Napster has the most to gain from the combo, as it will potentially gain access to XM’s fast-growing base of 4.4 million subs. As of March 31, Napster had 410,000.

XM + Napster is designed to work with a device Samsung is launching for the holidays that will allow subscribers to download and play XM programming as well as digital music. XM + Napster is expected to launch along with the portable music player.

Napster is designing a new version of its application for the service that will feature tracks recently played on XM shows. Users will be able to push a button while listening to XM to tag songs they want to download later from Napster.

Pairing precedent

Deal marks the first time a sat radio network and online musicstore, the two major kinds of outlets for digital music, have formed an alliance.

XM competitor Sirius has previously talked with Apple about creating a similar device and service combined with iTunes, but the two companies haven’t reached an agreement.

Shares in XM closed up 1% Wednesday at $36.85, while Napster stock rose 4% to $4.93.

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