Napster and Tower Records Japan Joint Venture Terms Unchanged; Company Clarifies Comments in 8-k Filing

Napster and Tower Records Japan Joint Venture Terms Unchanged; Company Clarifies Comments in 8-k Filing

LOS ANGELES, Oct. 20 /PRNewswire-FirstCall/ -- Napster, Inc. (NASDAQ:NAPS), the biggest brand in digital music, today clarified that the terms of its joint venture with Tower Records Japan (TRJ) are unchanged from the deal points outlined in its press release dated August 3, 2005. The Company believes that investors may have misinterpreted that an 8-k filing today suggested that terms of the joint venture had changed.

"We and Tower Records Japan are making strong progress towards the launch of Napster Japan and look forward to providing an update on this venture in the near future. We are extremely enthusiastic about entering Japan, which is the second largest music market in the world, with the number one music retailer in Japan as our partner. This joint venture is the blueprint for how Napster will continue its global rollout as we believe that this financial structure is extremely compelling," said Chris Gorog, Chairman and CEO of Napster.

According to the press release dated August 3, 2005, under the terms of the exclusive Napster/TRJ joint venture, TRJ will contribute up to $7 million in cash and undertake additional funding obligations in exchange for an approximately 70% majority equity stake in Napster Japan. TRJ will also provide the majority of the management team, local music content and extensive marketing for the new service through its network of 108 retail stores, Web sites, music magazines and other TRJ promotional vehicles. Napster will provide up to $3 million in cash, plus its globally-recognized brand, comprehensive technology platform, massive music library and ongoing technology, operational and marketing support in exchange for a 30% minority equity stake in Napster Japan and guaranteed royalty income. Napster will have the right to appoint directors to the company's Board and will have certain voting and other stockholder rights.

About Napster

Napster, the biggest brand in digital music, is a subscription service that enables fans to freely sample the world's largest and most diverse online collection of music and move an unlimited amount of songs to compatible MP3 players. Napster (www.napster.com) members have access to songs from all major labels and hundreds of independents and have more ways to discover, share and acquire new music and old favorites with community features like the ability to email tracks to friends and browse other members' collections. Napster also offers Napster Light, a "lighter" version of the service for those who just want to purchase songs and albums a la carte. Napster is currently available in the United States, Canada and the U.K. and is headquartered in Los Angeles with sales offices in New York, London and Frankfurt.

Safe Harbor Statement

Except for historical information, the matters discussed in this press release, in particular matters related to Napster's strategic relationship with Tower Records Japan, the success of the Napster service and the international expansion of the Napster service contain forward-looking statements that are subject to certain risks and uncertainties such as intense competition, the new and rapidly changing nature of the online music industry, failure to maintain strategic relationships, risks associated with governmental regulation and legal uncertainties, reliance on content provided by third parties and failure of the parties to enter into definitive agreements, that could cause actual results to differ materially from those projected. Additional information on these and other factors are contained in Napster's reports filed with the Securities and Exchange Commission (SEC), including the Company's Quarterly Report on Form 10-Q as filed with the SEC on August 3, 2005, copies of which are available at the website maintained by the SEC at http://www.sec.gov/. Napster assumes no obligation to update the forward-looking statements included in this press release.

Copyright (C) 2005 Napster, LLC. All rights reserved. Napster and Napster Light are either trademarks or registered trademarks of Napster, Inc. or its subsidiaries in the United States and/or other countries.

Investor Relations Contact:
Alex Wellins
The Blueshirt Group
(415) 217-7722
alex@blueshirtgroup.com

Source: Napster, Inc.

CONTACT: Investor Relations, Alex Wellins of The Blueshirt Group,
+1-415-217-7722, alex@blueshirtgroup.com, for Napster, Inc.

Web site: http://www.www.napster.com/

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