Roxio buys Pressplay; plans to revive Napster brand; says Apple iTMS at competitive disadvantage

“Shares of Roxio surged Monday after the software company agreed to buy Pressplay, an online music service jointly owned by Universal and Sony, in a $40 million deal that will resurrect the old Napster brand. Roxio, which acquired Napster for $5 million last year following its court-ordered closure, had said it was going to relaunch a legitimate successor under its well-known brand name. However, now it will jump-start that process by selling music offered by Pressplay,” reports Steve Gelsi for CBS.MarketWatch.

“‘The new Napster will be unrecognizable from the current Pressplay,’ said Chris Gorog, CEO of Roxio. ‘We’ll have ease of use and more features and will be a friendly, easier application.’ The terms of the pact give Roxio a legal digital music distribution framework and catalog rights with all five major music labels,” reports Gelsi.

“As for Apple, Gorog said he doesn’t consider the company a competitor for now, because ITunes operates only on Apple machines, which make up about 3 percent of the market. Even so, when iTunes becomes available for Windows-based computers, said Gorog, ‘We have a monster competitive advantage with the biggest brand in the online music business, and it’s recognized as a music brand and not a computer brand,'” Gelsi writes.

Full article here.

9 Comments

  1. “As for Apple, Gorog said he doesn’t consider the company a competitor for now, because ITunes operates only on Apple machines, which make up about 3 percent of the market. Even so, when iTunes becomes available for Windows-based computers, said Gorog, ‘We have a monster competitive advantage with the biggest brand in the online music business, and it’s recognized as a music brand and not a computer brand,'” Gelsi writes.

    That’s wishful thinking at best IMO. Apple has already made the dent, and the Napster “brand” has been dead for almost three years. If Roxio wants to make an impact, they have to get their new Napster out before Apple releases iTunes for Windows. That’s all there is to it

    BTW I heard that the Windoze version of iTunes will be free. That’s a pretty compelling reason for a PC user to want to use it, no? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />)

  2. It should be free. A free killer app is exactly what it takes to hook users, especially considering they’ll get money for it on the back end by selling more songs anyway.

  3. Roxio said it would spend about $20 million to fund the relaunch of Napster by March of next year. “We expect that this new business will result in negative cash flows until the service is widely adopted,” Roxio said.

    Negative cash flows?

    Not good business practice in this instance boys. How can you say you have a “huge competitive advantage” over already proven technology and in the next breath say you’ll have monetary loss until it is “widely adopted”.

    Interesting spin.

  4. Sounds like Roxio is blowing smoke to me. Apple has the highest brand recognition in the land…and they offer a complete solution. They own the high-end MP3 player market with the iPod. They have iTunes…vastly superior to anything else out there…and it’s FREE. And they have the marketing muscle to promote the hell out of there products. Roxio has to talk big, becuase…right now…that’s all they’ve got. Apple is delivering NOW.

  5. Now is the time to fish or cut bait.
    During it’s history, Apple has led the way many times, only to mismanage it’s lead or be ripped-off in the marketplace. Think about the Newton vs. the current PDA market, the Apple vs Microsoft lawsuit, clone Mac-OS machines, etc. Market leadership in internet-delivered digital music is going to be worth FAR MORE down the line than Apple is currently making selling Macs and software. Apple has the server capacity, the technology, the contracts, the name recognition and the ability IN PLACE to make this happen. I really hope Apple gets the PC side of the equation right AND on time.
    If Apple ever intends to take back market share from the PC platform it’s going to take M-O-N-E-Y and aggressive marketing. The profits from this could fund the development of incredible new applications and further development of the Mac OS. If they really want to hurt M$ where they live, they could release an OS for Intel/AMD machines that is compatible with Windows and Mac file formats, and undersell M$ in their own back yard on pricing.
    Many companies and individual users would jump at the opportunity to dump XP off their PC’s without havung to buy new hardware. Break M$’s stranglehold on the Intel/AMD PC world with a stable/functional OS and they will be cut down to a managable size. To do this would require M-O-N-E-Y, but the cash flow off of this service could do it as it matures. If anyone can make it happen, Apple can.

  6. I dont think Apple has it in them to win in this market long term. It just doesnt have the competitive cut-throat insticts that are necessary. That has always been Microsoft territory. Apple are excellent at making groundbreaking products. Microsoft are leaders in gaining market share…

  7. ummmm…let’s see what we’ve got here: Napster, a peer-to-peer share environment and Pressplay, a subscription service. Ok, so you pay them to download songs off of other subscriber’s Hard Drives? Or, maybe their software turns your desktop into a streaming server so your 2.7GHZ Pentium machine becomes a host to other subscribing parasites dragging your processing power to the equivalent of a 80286 DX2 machine. (while they grow fat & happy from subscription income and low infrastructure (hardware) investments.
    No thank you.

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