Tower Records Japan's joint venture with Napster has been formally established, the retailer said today (Oct. 25). Tower Japan says it hopes to have Napster Japan in operation by spring 2006.
Tower Records Japan's joint venture with Napster has been formally established, the retailer said today (Oct. 25).
Under the agreement inked Oct. 20 with U.S.-based download service Napster, Tower Records Japan parent company Nikko Principal Investments owns 53.5% of the joint venture. Tower Records Japan will have a 15% share and Napster will own a 31.5% stake.
Napster Japan will initially be capitalized at ¥240 million ($2.1 million).
The new venture will initially operate out of Tower's Tokyo headquarters under a board of directors chaired by Tower Records Japan CEO Hiroyuki Fushitani. Tower will provide the majority of the personnel, local music content and marketing behind the store. It's also funding the initiative with $7 million in cash.
Napster, meanwhile, is contributing $3 million in cash and lending its branding, music library and technology to the effort.
Tower Japan says it hopes to have Napster Japan in operation by spring 2006.
"We and Tower Records Japan are making strong progress towards the launch of Napster Japan and look forward to providing an update on this venture in the near future," said Napster chairman/CEO Chris Gorog in a statement.
"We are extremely enthusiastic about entering Japan," adds Gorog, "which is the second largest music market in the world, with the number one music retailer in Japan as our partner." Gorog notes that the joint venture is "the blueprint for how Napster will continue its global rollout" because, he says, the financial structure "is extremely compelling."
Napster has also launched stores in the United Kingdom, Canada and, soon, Germany. This is Napster's first joint venture to launch in a new country.