Roxio has acquired online music service Pressplay from Universal Music Group (UMG) and Sony Music Entertainment and plans to revive it under the Napster name before March 2004, Billboard Bulletin reports. As previously reported, Roxio, a maker of CD burning software, acquired Napster’s assets late last year.
Should the new Napster service turn a profit, UMG and Sony are each eligible to receive up to $6.25 million. Additionally, UMG and Sony each will have a representative on Roxio’s board of directors.
The two major label groups have pumped an estimated $60 million into developing Pressplay since its bow in 2001. The venture has content licensing deals with all five major labels and a host of independents, as well as distribution agreements with Roxio, Yahoo!, and Microsoft.
UMG, Sony, and Pressplay officials say consumer awareness of the Napster name motivated the deal. They maintain that the move is not a reaction to either the early success of Apple Computer’s new iTunes service, or a recent court decision that the Grokster and Streamcast peer-to-peer services could continue to operate.
Roxio, as well as UMG and Sony, are betting that consumers will be drawn to the Napster brand, even if its application is different than it was in the past. “If you put Napster up on a billboard, people are going to know what you’re talking about. If you put Pressplay up on a billboard, you’re going to have to explain what Pressplay is,” says Larry Kenswil, president of UMG’s eLabs division. “It’s just much easier marketing.”