By David Radin
Pittsburgh Post Gazette

You might have forgotten about Napster. But a savvy group
of software industry executives in Santa Clara, Calif., have not.

Napster was a Web-based music sharing service that
revolutionized the way students and others stole their music online. But it stepped on the toes of the lords of the music industry, who got the service shut down because it infringed generously on their copyrights.

Users fled to other music/file sharing services, such as
KaZaA and Grokster.

The music industry, in the meantime, founded its own services, such as Pressplay and MusicNet, which charged users for legal downloads but placed major restrictions on the use of the downloaded music. So users never really warmed up to the music industry download services.

Recently, Steve Jobs made some behind the scenes deals to
create his iTunes Music Store at Apple, a new music sharing
service that removes many of the restrictions that users don't like.

In the first two weeks, iTunes users downloaded over 2 million songs, paying 99 cents for each. Users like it; it is legal; and it creates a revenue stream for music companies that participate.

But the real genius has not yet made itself felt in the marketplace. I suspect that we'll award that label to Roxio, the company that gave us Easy CD Creator, the top selling CD burning software.

The executives at Roxio, which was formed in September 2000
as a spinoff of hardware company Adaptec, have been
positioning the real music coup -- the restoration of Napster.

Last November, Roxio purchased the Napster name, domain,
technology and other assets for $5 million (the equivalent of only five weeks' revenue for Apple's iTunes).

In February, the company signed up Sean Fanning, the creator of Napster, as a consultant.

But the most brilliant move of all was made this week, as
Roxio purchased PressPlay from Universal Music and Sony
for $12 million and Roxio common stock.

With this purchase, Roxio now has catalog rights to distribute music from all five major music labels -- the perfect asset base on which to relaunch Napster.

Now the company has the most powerful music catalog in the
business, a product name with 98 percent awareness and the
backing of the music companies (because they will own a
piece of Roxio).

Expect the new Napster to operate legally -- and to provide the type of service that consumers will be willing to pay for.

In addition to the estimated $45 million that the company has already shelled out for the various assets, the company expects to spend another $20 million on the relaunch.

And why not? According to Roxio, more than $5 billion in music will be downloaded in 2005. The company is poised to become the dominant player competing for that revenue. And it will spur additional sales of its software products to record homemade CDs on an estimated 500 million CD recorders.

David Radin is a nationally syndicated radio show host.

Red said:

Then it might as well be called something other than Napster. The whole idea of Napster was for people to share music for free without asking for the consent of the record companies. This is just a way to cash in on the familiarity of the name.

BINGO!