SEATTLE, Aug. 24, 2020 /PRNewswire/ -- RealNetworks,
Inc. (Nasdaq: RNWK) today announced its support for the acquisition
of Rhapsody International, Inc., which does business as Napster, by
MelodyVR Group PLC. RealNetworks is the majority owner of Napster,
with an approximate 84% stake. MelodyVR Group PLC, the leading
creator of live virtual reality music experiences, intends to
combine its MelodyVR subsidiary with Napster to create a new
differentiated entity. The acquisition is expected to close in the
fourth quarter of 2020.
"Rhapsody and Napster have travelled a long and winding road,"
said Rob Glaser, Chairman and CEO of
RealNetworks and Chairman of Napster. "We first became involved
with Rhapsody when we acquired Listen.com in 2003, and then
Rhapsody acquired Napster in 2011. We are proud of our stewardship
of this pioneering business and iconic brand, and grateful for the
hard work by the entire Napster team to keep the torch alive all of
these years. We're delighted to pass the baton to Anthony Matchett and the innovative team at
MelodyVR. We'll continue to root for Napster and are pleased that
we'll be ongoing stakeholders in MelodyVR's success."
"Going forward, Real will continue to focus the operations of
Real on our primary growth initiatives, such as our SAFR computer
vision platform and our GameHouse free-to-play casual games
business," Glaser continued. "We will also continue to nurture
innovation, for example our Scener watch party service and
platform."
Rhapsody was the first on-demand streaming music service to
offer monthly subscribers unlimited access to a massive library of
digital music. It was also the first music service to provide
content from the top five major record labels of the time.
RealNetworks acquired the Rhapsody service in August of 2003. In
2010 Rhapsody began operating as an independent entity, rebranding
itself in 2016 as Napster, followed by a pivot to the "Powered by
Napster" B2B strategy, which focused on selling the Napster music
Platform-as-a-Service.
The Napster platform began 2020 with over 3 million users on
four continents, delivering more than 90 million licensed tracks to
consumers and the many B2B and Platform-as-a-Service partners. It
served 10.8 billion streams in 2019 with revenues of $113 million.
The price of the acquisition is approximately $70M, comprising $15M in cash, $11M
in MelodyVR stock, and assumption by MelodyVR of approximately
$44M in payment obligations,
primarily to various music industry entities. Consideration payable
to RealNetworks is subject to a $3M
escrow and certain further indemnity claims, as well as contingent
consideration obligations associated with its acquisition of
Columbus Nova's 42% stake in Napster
in January of 2019. Real intends to provide additional details
regarding the expected economic benefits to Real of this
transaction at its Q3 earnings call in early November, or
sooner if the MelodyVR transaction closes before then.
About RealNetworks
Building on a legacy of digital
media expertise and innovation, RealNetworks has created a new
generation of products that employ best-in-class artificial
intelligence and machine learning to enhance and secure our daily
lives. SAFR (www.safr.com) is the world's premier facial
recognition platform for live video. Leading in real-world
performance and accuracy as evidenced in testing by NIST, SAFR
enables new applications for security, convenience, and analytics.
For information about our other products,
visit www.realnetworks.com.
RealNetworks is a registered trademark of RealNetworks, Inc.
All other trademarks, names of actual companies and products
mentioned herein are the property of their respective
owners.
For More Information:
Investor Relations for RealNetworks
Kimberly Orlando, Addo Investor
Relations
310-829-5400
IR@realnetworks.com
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