Napster buyer plans new services
By Frank Barnako, CBS.MarketWatch.com
Last Update: 10:19 AM ET Nov 15, 2002
SANTA CLARA, Calif. (CBS.MNW) -- Napster is dead. Long live Napster.
Roxio Inc. (ROXI) developer of CD-burning software, said it has reached agreement to acquire the intellectual
property assets, including patents, of Napster Inc. for $5 million in cash and warrants on 100,000 shares of its
stock. The Delaware court handling Napster's bankruptcy still must approve the deal.
"Roxio's acquisition will expand our role and enhance our offerings to consumers," said Chris Gorog, president
of Roxio. "We feel Napster has value that is synergistic with Roxio'sRoxio's current media offerings and
long-term vision for the future of digital media entertainment."
MusicNet tunes up for mid-December
MusicNetMusicNet plans to replay its launch efforts of last December, but get it right this time. In preparation for
next month's rollout of a new version of the online music subscription service, MusicNet said it, too, now has
licensed music from the world's five major music labels, giving it access to "hundreds of thousands of tracks."
Subscribers will be able to keep the music they download by copying it to portable devices or CDs. The
service's distribution partner, America Online (AOL), will incorporate it into its own AOL Music area. Co-owner
RealNetworks (RNWK) will introduce it to its subscription customers early next year, according to the San Jose
Mercury News.
Analysts say the first chapter in paid music services has now been written. The majors, including MusicNet
and PressplayPressplay, have deals with the five biggest music labels (SNE) (V) (AOL) while
MusicmatchMusicmatch has agreements with four. "Now that all these services have access to the same
types of music, how are they going to compete?" said Susan Kevorkian, digital music analyst for IDC, a
research firm. "This is where things begin to get interesting."
No recession for broadband access growth
Almost 30 percent of U.S. households accessing the Internet are now doing so by high-speed connections like
cable modems and DSL. From February 2000 through last June, the rate of broadband Internet use has nearly
tripled, according to Gartner Dataquest. "Neither the economic slowdown, or the relatively high price points
have slowed adoption," said Margaret Schoener, principal analyst. She said the number of households with
broadband capability has been growing at an average monthly rate of 9 percent. Cable modems have
increased their share from 49 to 54 percent of the market, while DSL has grown from 19 percent to 34 percent.
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