16 Sep Amidst Chaos, the Music Business Goes On
Enough has been said by folks far more knowledgeable than I about the trouble facing Wall Street the past few days, weeks and months. I don’t intend to add much to that discussion. Since I live and breath the music and tech world every day my attention has honestly been there and not on the bigger financial picture. That said, yesterday I took some time to connect the two. In the context of all the macroeconomic chaos going on, I find it both exciting and calming that companies in our space are taking the long view of things. Economic downturns, no matter how catastrophic, are cyclical, and when conditions recover companies will still be faced with the same strategic challenges that they are today.
Best Buy’s $121 million acquisition of Napster proves my point. Even if you don’t like this particular deal, you can’t avoid the conclusion that Best Buy sees itself as a player in the future of the music business. But more importantly, Best Buy isn’t allowing temporary economic setbacks (and potential drops in consumer spending) to hinder the fulfillment of that vision. Granted, Best Buy is getting $67 million in cash and short term investments held by Napster, so when all is said and done the deal is only costing them $54 million – not a hugely significant figure for this $41billion company. Even so, the commitment to a strategic vision over the long term is clear. So, as I thought about this acquisition yesterday, I realized that it was both exciting as an example of change in the music business, and calming as an example of smart people taking the long view.