Roxio buys Pressplay for Napster relaunch

Roxio has snapped up online music subscription service Pressplay for cash and stock estimated at $39.5m (£24m)aimed at launching...

Roxio has snapped up online music subscription service Pressplay for cash and stock estimated at $39.5m (£24m), with the intention of launching a online service under the Napster brand.

The deal follows Roxio's purchase of the remaining assets of fallen net music pioneer Napster late last year.

Napster was ordered offline in 2001 amid copyright infringement complaints by the big record labels. The labels have since set about promoting their own online music services, albeit with little success.

Pressplay was formed by Vivendi Universal and Sony Music Entertainment at about the same time that Bertelsmann, AOL Time Warner, EMI Group and RealNetworks backed rival service MusicNet.

With Pressplay and Napster assets now under Roxio's belt, the company said that it intends to resurrect "the most powerful brand in the online music space".

Roxio's purchase of Pressplay gives it catalogue rights to all five major labels as well as a digital music distribution infrastructure.

Under terms of the deal, Roxio purchased majority ownership in Pressplay for $12.5m (£7.6m) in cash and 3.9 million shares of Roxio common stock.

The contract also stated that Sony Music Entertainment and Universal Music Group each have the right to earn $6.25m (£3.8m) based on positive cash flows from the Napster service.

Napster will compete with iTunes online music store, launched by Apple Computer last month, which has, so far, reported strong demand.

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