Known for shaking the music industry with its controversial peer-to-peer sharing model, Napster is making a comeback. On Tuesday, 3D Tech Company Infinite Reality announced it had acquired the iconic brand for $207 million. Napster’s new vision goes beyond streaming. This is being rethinked with social features, virtual events and digital products aimed at music fans and creators.
Napster acquired for $207 million
The acquisition marks another chapter in Napster’s long, unpredictable story. Launched in 1999 by Shawn Fanning and Sean Parker, Napster was the first widely used peer-to-peer file sharing platform, allowing users to trade MP3s long before legal streaming existed. It didn’t last long, but faced legal pressure from the music industry and lawsuits from Metallica – Napster has caused a change in the way people access music.
After closing in 2001 and filing for bankruptcy a year later, Napster’s assets bouncing among several owners. In recent years, it has reappeared as a paid music streaming service, offering licensed tracks at a monthly fee. Although it never regained the spotlight, it maintained a loyal user base and valuable streaming rights.
Napstar leads a new life as a metaverse music hub
Infinite reality sees Napster’s legacy as an opportunity. CEO John Acunto told CNBC the company wants to take Napster beyond streaming by turning it into a more social and interactive platform built for virtual spaces and marketing it in Metaverse. The idea is to create an online environment where fans can attend concerts, host listening parties and purchase both physical and digital products.
“When I think about the clients who have an audience, whether influencers, creators, I think it’s very important to have a connected space around the music and the music community,” Acunto told CNBC. “We’re not creating a space for music in the streaming space.”
Napstar has revived on the growth list of once-iconal brands, following the recent comebacks of Kodak, Nokia and MacIntosh.
Since 2016, Napster has been operating as a small streaming service in a space dominated by Spotify and Apple Music. In 2022, it was acquired by blockchain company Algorand, and was later joined by current CEO Jon Vlassopulos. Under Vlassopulos, the company has pushed up its Web3 and digital ownership capabilities. That direction attracted the attention of infinite reality.
Acunto said the existing licensing agreement with Napster’s record label made it an attractive acquisition. These transactions give the company a legal basis to expand its offering. Combining it with Infinite Reality’s Web3 infrastructure opens the door to new use cases for both artists and fans.
According to Vlassopulos, artists can build custom virtual environments, from beach parties for reggae artists to more stylized digital hangouts, allowing them to connect with their fans in real time.
Acunto described it as “Clubhouse Times 1 trillion,” pointing to the kind of shared virtual experiences that took off during the pandemic but disappeared when people returned to the actual event.
Founded in 2019, Infinite Reality has recently achieved a succession of acquisitions by snapping up Landvault, a company focused on drone racing league, virtual retail startup obsessions, and digital real estate. In January, the company said it had raised $3 billion at a $12.25 billion valuation, despite not name it an investor. Acunto said they preferred to remain anonymous.
With this deal, Napster isn’t just returning. It has been rebuilt on another mission. And this time, it’s legal.
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