The live online music company MelodyVR announced on Aug. 21 that it was acquiring the music streaming company Napster for $70 million. Yes, that Napster. The same one that, if you are of a certain age, you might have used to download music illegally at the turn of the millennium. Its business model morphed over the years, but the Napster brand has never actually died. Today, it is a music streaming service with 3 million users.
The original version of Napster burned brightly and briefly. It was created in June 1999 by the brothers Shawn and John Fanning, and founded as a business by Shawn and his friend Sean Parker, later the first president of Facebook. At the time, sharing MP3 files was challenging; the brothers thought they could make sharing a lot easier by giving people access to other users’ hard drives through a peer-to-peer file sharing software.
Napster’s software worked and the application became a global sensation. Never before had people had access to so much free music. Though far fewer people were online in 2000, at its zenith, Napster still had about 70 million users globally (by comparison, Spotify has about 290 million today, after 14 years in operation). Napster gave users access to more than 4 million songs; at some universities, traffic from Napster accounted for about half the total bandwidth.
In 2001, the Recording Industry Association of America, the trade group for the US music industry, sued Napster for facilitating the illegal transfer of copyrighted music. A US court found Napster guilty and told the company that unless it was able to stop that activity on its site, it would have to shut down. Napster couldn’t comply. In June of that year, the company shuttered. Though the original Napster was no more, the software revolutionized the music industry, leading consumers to believe they should have access to whatever music they wanted whenever they wanted, which ultimately led to the rise of subscription streaming apps like Spotify.
It’s been quite a wild ride for the Napster brand since then. After the shutdown, Napster’s brand and logo were acquired by the software maker Roxio at bankruptcy proceeding in 2002. Roxio used the Napster name for their own fledgling streaming service, which was later sold to electronics company Best Buy, who then sold the service to streaming company Rhapsody International. Rhapsody build Napster into a viable streaming company, with $106 million in revenues in 2019.
MelodyVR’s CEO told Rolling Stone that purchasing the current version of Napster will give the company a chance to compete against Spotify and Apple Music in the music streaming space. Founded in 2018, MelodyVR works with musicians and concert promoter Live Nation to stream concerts that can be watched on virtual reality headsets on phones. The British startup lost over $21 million in 2019, but downloads of its app are 10 times higher this year than last, according to the company. By combining Napster’s music streaming services with its original concert content, MelodyVR may be able to offer a different product than the music streaming giants. At the very least, the Napster name will connect their service with digital music history.