Circuit City Tunes Up Again

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Circuit City (NYSE: CC) is getting back into the music business -- this time, with the security of a good set of earplugs. It's teaming up with Napster (Nasdaq: NAPS) to launch a Circuit City-branded music subscription service. The offering is little different from Napster-To-Go, allowing unlimited streaming and portability for $14.95 a month, with a few exclusive tracks available to Circuit City customers. The service will be actively promoted through Circuit City's stores, as well as its popular website, when it launches later this month.

This isn't the first time that Circuit City has given digital music a go. It actually owned the MusicNow service before selling it to Time Warner's (NYSE: TWX) AOL two years ago. In a perfect circle, AOL eventually tired of running the service and struck a deal to migrate most of its roughly 350,000 subscribers to Napster earlier this year.

It's a win-win deal. Napster has a chance to expand its growing base of 830,000 paying accounts with a strong retail-level marketing push. Circuit City can collect a piece of the action without the overhead headaches of running a music subscription service again.

The pairing also draws a thicker line in the sand. Last year saw Best Buy (NYSE: BBY) teaming up with SanDisk (Nasdaq: SNDK) and Napster rival RealNetworks (Nasdaq: RNWK) to launch the Best Buy Digital Music Store. It's only natural for Circuit City to counter Best Buy's holiday push into digital music by hooking up with the feisty main competitor to RealNetworks' Rhapsody subscription service.

It's a battle of the bands, disguised as a battle of the brands. Lose those earplugs, Circuit City. You won't want to miss a single note of the competitive concerto.

Best Buy and Time Warner have been recommended by David Gardner for his Stock Advisor subscribers. You can tune in over the next few weeks for free with a 30-day trial subscription.

Longtime Fool contributor Rick Munarriz is a huge music fan, but with subscriptions to both satellite radio services he hasn't made the move to tack on a digital music subscription service as well. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.