Napster, the company that cultivated an era of music piracy and pushed the music industry into the digital era before becoming a paid streaming service, is once again entering a new era. London-based virtual reality concert streamer MelodyVR announced a surprise $70 million acquisition of the company on Tuesday, creating what MelodyVR hopes to be a new music experience combining recorded music and livestreaming.
“We want to give consumers what we think is a really differentiated offering with music content — whether that’s a live show or an album,” MelodyVR CEO Anthony Matchett tells Rolling Stone. “We want to put all that in one place. For a long time we thought it’d be wonderful if, alongside an artist’s concert or livestream, we could deliver you a playlist of the album. That’s just one offering we can give with it.”
MelodyVR is one of the more prominent companies in the burgeoning livestreaming ecosystem. It’s aired concert for acts including Post Malone, John Legend, and Khalid, and through the Covid-19 pandemic, it’s seeing a surge in interest from artists and fans unable to attend shows. The company told Rolling Stone in July that it had aired 10 times as many concerts through the pandemic compared to the same time frame a year ago, and experienced a 1000% increase in downloads for its app. Since the pandemic started, MelodyVR also set up performance studios in Los Angeles and London for artists for socially distanced virtual reality sets.
To the casual music fan, Napster is still mainly associated with its controversial past of enabling music piracy for its users as a peer-to-peer mp3 sharing service — but that company is long gone. The original Napster went bankrupt after facing lawsuits from the likes of Metallica and Dr. Dre, and after the rights to its branding and logos hopped around throughout the 2000s, it merged with online music store and streaming service Rhapsody in 2011. Rhapsody rebranded under the Napster name in 2016.
Napster currently has 3 million paying subscribers, operating as a consumer-facing business along with business-to-business offerings. That’s a relatively small number in the streaming space — for reference, Spotify, the world’s largest music streamer, has nearly 300 million users and 138 million paying subscribers — but Napster’s highly recognizable name is a further asset. Rhapsody’s parent company RealNetworks currently holds an 84% ownership stake in the company, but MelodyVR hopes to close the acquisition in the next several months.
MelodyVR is entering an incredibly competitive record streaming marketplace dominated by Apple Music and Spotify through its Napster acquisition, and recorded music itself can be hard to rely on as even Spotify’s profits aren’t consistent. But Matchett says he doesn’t see the more ubiquitous recorded music streamers as MelodyVR’s direct competitors, because his company will offer a different experience. Still, Matchett acknowledges that the bigger streamers are starting to diversify beyond recorded music — like Spotify with its massive slate of podcast acquisitions and Apple withs its radio channels — which could encroach on his company’s territory.
“Historically, the major recorded music streamers aren’t content creators,” he says. “They may get content from the record labels but they don’t create new content like we do. They may pay massive sums of money to broadcasters for exclusive rights to a show, but again that’s not their content. We come at this from a different angle.”