A Legitimate Napster Set to Return - Multichannel

A Legitimate Napster Set to Return

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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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