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RealTime IT News

CD Burning Firm Buys Napster

The wretched existence of file-sharing service Napster took yet another turn Friday with CD burning firm Roxio announcing it would shell out about $5.3 million to acquire the controversial company's assets.

Napster, which was on the auction block for several months, was snapped up by Roxio in a transaction that included all of Napster's intellectual property and technology patent portfolio.

The Santa Clara, Calif.-based Roxio, known for its Easy CD Creator software, said it would not assume any of Napster's debt burden which is still the subject of litigation.

Roxio's $5.3 million bid bettered one by porn provider Private Media Group , which showed offered to pay one million shares of stock for the Napster.com domain name and technology assets.

The Roxio purchase is still subject to the approval of the U.S. bankruptcy court and it is still not clear how a firm known for DVD/DVD burning and photo/video editing burning would make use of file-swapping technology.

Company officials could not be reached Friday morning to discuss the plans but, industry watchers expect the company to integrate Napster with its media distribution moves. Roxio already has a deal with legitimate music service Pressplay it the Napster assets - particularly the user base (e-mail addresses) could turn out to be a valuable base to sell the service to online music fans.

The company's announcement was vague on the plans: "We feel that Napster has value that is synergistic with Roxio's current digital media offerings and long-term vision for the future of digital media and entertainment..

The drama over Napster's bankruptcy sale included the bankruptcy court denying a $92 million proposed sale to Bertelsmann AG.

Bertelsmann was a major investor in Napster and had bankrolled the company through much of its legal trouble with the Recording Industry Association of America (RIIA).

Bertelsmann had initially inked a deal to pay $8 million for the assets but the court ordered a re-auction after secured creditors objected to the terms of the transaction.

Separately, online music subscription service MusicNet announced a deal with Universal Music Group and Sony Music to offer downloadable digital files from all five major record labels.

The Seattle-based MusicNet, which is backed by AOL-Time Warner and RealNetworks is the last of the legitimate paid download services to ink licensing deals with the major record labels. These deals are seen as clearing the final hurdle in the quest to roll out music download services that can adequately compete for the wallets of music fans willing to pay to listen or download music from the Internet.

Last month, rival Pressplay snagged a licensing deal with BMG and is locked in discussions with Warner Music Group to round out its music providers.