A Legitimate Napster Set to Return
By Matt Stump -- Multichannel News, 5/20/2003 7:41:00 AM
Roxio Inc., the online music company that bought the rights to the Napster name and some of its underlying technology, is buying pressplay, the online music service owned by Universal Music Group and Sony Music Entertainment, which was formed to offer a legitimate music alternative to Napster in the first place.
Roxio plans to launch a legal online service under the Napster name, figuring the name recognition alone will help it to gain a foothold in the marketplace.
Roxio chairman and CEO Chris Gorog called Napster "the most powerful brand in the online music space." With pressplay, "we have the most complete and scalable legal technology infrastructure to use as a platform to relaunch Napster," he said.
Roxio is spending $12.5 million in cash and another 3.9 million shares of its stock, valued at $27 million, to complete the deal. Sony and Universal also get rights to earn up to $6.25 million from the relaunched service, Roxio said, as well as seats on the board.
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