The software company that owns Napster, the one-time scourge of the record industry, is set to become a major player in the burgeoning legal music download business after agreeing to buy the downloading operations of two of the record companies it threatened to destroy.
Roxio, which makes software that enables computer owners to copy digital tracks to CD, has agreed to pay Universal and Sony £24.3m in cash and shares to buy Pressplay in a move that takes the story of Napster full circle.
Pressplay will then be used as the basis for a relaunched Napster, the music download service Roxio bought for £3.1m in a fire sale of the company's assets.
Roxio will take over Pressplay's existing agreements with major labels and online back catalogue rights to a variety of artists including Justin Timberlake, Eminem and Coldplay.
"With our acquisition of Napster we obtained the most powerful brand in online music," said the Roxio chief executive, Chris Gorog.
"Now, with our acquisition of Pressplay, we have the most complete legal technology infrastructure to use as a platform to relaunch Napster.
"After taking the necessary time to add features and improve usability we will launch a service that builds on the Napster brand," he added.
The chief financial officer, Elliot Carpenter, said the company expected to spend about £12m on relaunching Napster, which was founded by dotcom whizzkid Shawn Fanning on a laptop in his uncle's garage.
"We are tremendously excited about becoming part of Roxio," said Mike Bebel, the president of Pressplay, who will stay on to run the new service, reporting to Mr Gorog.
Sony Music and Universal Music each have the right to earn up to £3.8m as part of a profit share deal resulting from the new Napster service and both companies will have a representative on Roxio's board. Mr Fanning has been brought back on board as a consultant and the company plans to launch a download service under the Napster brand before the end of the year.
It will feature a large amount of downloads from all major labels available on a track-by-track basis.
The purchase of Pressplay is being seen by music business insiders as evidence of the failure of the major labels' initial strategy of launching their own online music subscription services.
Pressplay and MusicNet, its equivalent backed by EMI, Bertelsmann and Warner Music, were launched in an attempt to head off the threat of peer-to-peer services such as Kazaa and Grokster, which allow users to swap pirated tracks over the web.
However, they failed to find favour with the public, who were unprepared to pay a set monthly subscription fee for a limited number of tracks with heavy restrictions on the way they could be transferred to CD and portable players.
In contrast Apple's iTunes service, which offers instant downloads of a wide variety of tracks at a set price of 99 cents each, has been an instant hit.
More than 1 million tracks have been downloaded every week since it launched in the US earlier this month.
At the height of its popularity in 2000, more than 80 million computer users were using Napster's huge library of free music.
It caused panic in the record industry, which was already suffering faltering sales as a result of traditional piracy and increased spending by consumers on other leisure products.
Napster closed in July 2001 after the major music labels won an injunction forcing the site to remove all copyrighted songs from its database.
A year later the company closed down altogether after a brief attempt by German media giant Bertelsmann, which invested in the company, to resurrect the site as a paid-for service.
The site never went back online and a US judge eventually ruled that Bertelsmann could not buy the bankrupt company's assets because the two businesses were too close.
Earlier this year the German media company was hit by a £10bn lawsuit from music publishers, who claimed it was responsible for lost royalties from Napster.
