News of the Weird: Roxio Acquires Napster Assets

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Date: Tuesday, November 19th, 2002, 07:07
Category: Archive

Don’t know about you, but this news slipped under my radar — maybe because my poor mind couldn’t comprehend the spectacular nosedive that would make Napster’s intellectual assets worth just $5 million in cash. Your typical New Yorker could sell the house in the Hamptons and buy that . . . or, for that matter, unusual candidate Roxio can nab it. Of course, Roxio tells it differently: the software company, makers of Toast and Easy CD Creator CD-burning software, proclaims itself maker of “the best selling digital media software in the world,” because “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.” (Clear now?) Roxio is purchasing “substantially all” of Napster’s assets, which includes several technology patents. (I’d personally like to know whether the Napster trademark was included in the deal — doesn’t seem to be an indication that it was.)

I don’t argue with there being a certain synergy between Roxio and Napster. But just keep in mind that Napster, shortly before its total implosion, had announced a historic deal with mighty BMG, a far cry from a 400-employee Santa Clara software company, even one that does have a crown jewel of a burning product. So, forget Napster: when will record companies embrace online distribution? Maybe Roxio as an independent company can at least make a pitch that won’t cause the open interlabel warfare a successful BMG-Napster alliance would have. Then again, whatever entertainment industry alliances Roxio claims to have in its press release, this is a company that makes burning software. An industry that moved to stop DAT, VHS, and cassette tapes for crying out loud may get a little nervous talking to a company that helps people burn CDs and DVDs. What, exactly, will Roxio be able to do with a handful of software patents for file sharing? As many pointed out, Napster was the brand identification and the network of people using it. Even if the lukewarm success of services like LimeWire suggests ease of use was a key part of the Napster formula, the fact that the company’s activities were ultimately deemed illegal can make even $5 million look steep. This looks like a buy first, figure out what to do with it later move. So let’s hope Roxio got the moxie to translate this mess into some kind of useful product: more power to them.

The acquisition is awaiting approval of the bankruptcy court by the end of the month.

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