today announced that it had acquired Sony/Universal’s Pressplay online music service. The company plans to use Pressplay as the basis for its relaunch of Napster.
A joint venture between Universal Music Group (UMG) and Sony Music Entertainment (SME), Pressplay has been acquired by Roxio for US$12.5 million in cash and 3.9 million shares of Roxio stock — a purchase valued at about $39.5 million. SME and UMG will both appoint representatives to Roxio’s Board of Directors, while Pressplay’s president, Mike Bebel, will report to Roxio Chairman and CEO Chris Gorog.
Napster, once reviled by the commercial music industry as a way for people to steal music, will now be reborn as a legitimate music service, according to Roxio. And as part of this transaction, Roxio has acquired catalog rights with all five major music labels, much as Apple has also done with its pay-to-play iTunes Music Service.
“After taking the necessary time to add features, enhance functionality and improve usability we will launch a new service with an extremely compelling consumer experience that builds on the qualities of the Napster brand,” said Gorog.
Roxio CFO Elliot Carpenter added that his company plans to invest about $20 million to fund Napster’s relaunch. What’s more, Roxio expects to see the business report negative cash flow until Napster sees wide adoption. Roxio seems confident, however, that Napster’s brand recognition and Pressplay’s technology will be a winning combination.
Napster was available for the Mac, but Pressplay’s technology requires Windows Media Player and only supports various flavors of Windows. Roxio, however, is a company that keeps its feet in both the Mac and Windows worlds, with Mac-compatible titles like Toast and Jam. Will the reborn Napster support the Mac? Roxio representatives were unavailable for comment as MacCentral posted this article, so that question remains unanswered for now.