RealNetworks doubles Napster investment to become 84% owner by acquiring debt and equity interests in Rhapsody International which trades as ‘Napster’. Following the transaction, RealNetworks has become the majority owner of Napster, with approximately 84% of outstanding stock, up from RealNetworks’ previous stake of approximately 42%.
RealNetworks has committed to pay $1 million cash up front and an additional $14 million over time subject to certain conditions, with additional consideration depending on subsequent events. A total of up to $40 million would be paid should the purchased stake be sold on for $60 million or more in the next five years.
Rob Glaser, Chairman and CEO of RealNetworks and Chairman of Napster, commented, “We are very pleased to have deepened our partnership with Napster. Under Bill Patrizio’s leadership, Napster has delivered five consecutive quarters of positive operating income and generated over $14 million in operating income in the first three quarters of 2018. This success was achieved by pivoting to a B2B strategy focused on selling the Napster platform as a service. We think Napster’s future is very bright.”
Napster’s innovative ‘Powered by Napster’ music and audio products and services generate revenue primarily through subscriptions either directly to consumers or through distribution partners, and through technology and platform licensing and operating fees.
Napster will continue to run as an independent subsidiary of RealNetworks with its own board of directors, strategy, and management team.
Rhapsody International operates the Napster platform in 33 countries with a premium subscription service giving millions of consumers unlimited ad-free access to music and more on any device – online or offline. Rhapsody recently showcased its ‘Powered By Napster’ technology in Sony’s mora qualitas HiRes streaming service in Japan.
