Napster Group PLC Operational Update (3669V)
April 14 2021 - 2:02AM
UK Regulatory
TIDMNAPS
RNS Number : 3669V
Napster Group PLC
14 April 2021
Napster Group PLC
Operational Update
Napster Group PLC ("Napster" or the "Group"), a leading music
company and operator of the MelodyVR and Napster platforms,
provides the following operating update.
The acquisition of the Napster streaming service in December
2020 has enabled the Group to accelerate its subscription-based
revenue model which now boasts more than 5 million users (including
subscribers from PaaS services) worldwide. Proforma revenues from
the Napster streaming service and Melody VR service combined
totalled $96 million in 2020 and during January 2021 generated
monthly revenues of c. $8m.
Napster - A Next Generation Music Platform
Since acquisition, the Company has now largely completed the
integration of the MelodyVR and Napster businesses, which has led
to greater efficiencies and significant opex savings across the
group. Our in-house team of leading strategists and engineers is
currently developing a new music platform which is intended to be
launched as an update to the existing Napster offering later this
year. The new platform will not just combine Napster's music
streaming capability with Melody VR's capabilities in streaming
live music, but it will also offer access to a library of content
including documentaries, short form episodic content and music
feature films, as well as exclusive recorded performances, own
brand physical events and digitally ticketed live events.
In order to focus investment on the development of the new
platform, MelodyVR and Napster will continue to operate as
stand-alone businesses until the launch of a new Napster branded
platform, albeit with marketing activity to cross promote the
brands. At launch, MelodyVR customers will be encouraged to migrate
to the updated Napster platform. The platform will launch across
multiple connected devices such as smartphone, tablet, smart TV,
desktop, console, native VR, home audio and in-car.
Management has taken the decision that whilst product
development is taking place, a reduced amount of operational
resource will be directed towards the growth of the MelodyVR
platform, both application updates and new content streams will be
limited during these coming months as resources are now focused on
the development and subsequent relaunch of Napster that will take
place later this year.
Partnerships with companies like SingTel will continue, where
the current MelodyVR app is being used to showcase the power and
capability of 5G network technologies will continue. Customers with
5G data plans will gain a three-month subscription to access the
MelodyVR platform with the option to extend at the end of the term.
We believe that the new Napster product will appeal to both new and
existing B2B partners and will continue to serve as a key use case
for 5G networks. It is anticipated that extensive partner marketing
support will be provided at launch in combination with a strong
customer pipeline from our partners providing the opportunity to
further increase customer acquisition and revenue growth
post-launch.
Financing Update
As announced separately today, the Group has secured an
increased funding commitment from Nice & Green S.A to a total
of GBP8 million (by way of subscription for unsecured convertible
loan notes) on an accelerated basis so that the full commitment can
be accessed by June 2021. This increased commitment together with
the term facility provided by our largest shareholder Davis Capital
results in total funding for FY21 of c.$40m and secures the
development and launch of our new music platform.
Outlook
It is the Group's belief that the Company's new platform, under
a soon to be relaunched Napster brand, will resonate with music
fans around the globe, offering streaming, video content and
immersive VR experiences. Using proven customer acquisition and
marketing strategies to build our subscriber base, we have clear
ambitions to significantly increase subscriber and user numbers,
driving revenues and in turn accelerate our progress towards
becoming cash flow positive.
The Board believes that we have a compelling product, world
class partners and a clear plan to create value for
shareholders.
Anthony Matchett, Group CEO, commented:
"We recognise that this has been a difficult period for
shareholders, but we are incredibly pleased with our recent
developments and believe that the acquisition of the Napster brand
is transformative for our business. We intend to relaunch the
Napster product later this year and to-date the reception to our
plans has been overwhelmingly positive.
"Our growth plans are ambitious, but operationally realistic,
and we are excited about the growth potential and value that we can
create for the music industry and for our shareholders in the
coming years."
A recorded presentation is available on the company website:
www.napster.group .
For further information:
Napster Group PLC email@napster.group
Anthony Matchett, Group CEO
Equitory (IR) equitory@napster.com
Clara Melia/Geoff Callow
Arden Partners plc (Nominated Adviser and Broker) +44 (0)20 7614 5900
Corporate Finance: Ruari McGirr / Benjamin Cryer
Corporate Broking: Simon Johnson
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