Circuit City Store Inc. (NYSE: CC) and Napster Inc. (NASDAQ: NAPS) have teamed up to offer a new digital music service cleverly called "Circuit City + Napster." (I wonder how many marketing gurus it took to come up with that one.) The new service, which starts this coming Sunday, will give consumers unlimited downloads for $14.95 per month or 99 cents per download.
It's hard to imagine what exactly Circuit City + Napster's competitive advantage is here. With iTunes already deeply entrenched in the online downloading business, this looks like a pretty desperate attempt by Circuit City to become more relevant. I just don't understand why someone would choose to go with the new service over Napster. Perhaps the venture will be able to lure some new customers with price promotions such as the current free month for new subscribers, but it seems unlikely to generate long-term profits. Neither stock have moved much today in reaction to the news as the market seems unimpressed.
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