Napster sold for $207 million to tech startup Infinite Reality

Napster has been sold for $207 million to tech startup Infinite Reality.

The startup, which describes itself as specialising in developing "cutting-edge, AI-powered 3D immersive experiences" announced on Tuesday (March 25) that it planned to turn Napster, now a music streaming service, into a "social music platform".

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In a statement published today (March 26), Infinite Reality shared plans to create a "newly-reimagined" Napster, that will serve as both a streaming service and a social media platform to encourage "fan engagement over passive listening," allowing artists to "monetise" interactions with fans.

The startup also shared its plans to "leverage AI" for "greater personalisation", as well as assisting with "customer service, sales and community management".

While it is primarily known for its function as a peer-to-peer file sharing service in the 00s, Napster is now an independent digital streaming service with 110 million tracks available in its music library.

The company has changed hands several times in recent years. In 2020, British startup MelodyVR purchased Napster but soon sold it to Web3 technology companies Hivemind and Algorand two years later in May 2022.

Originally established in 1999, Napster was widely used as a MP3 file-sharing service until it was "shut down" in 2001; it would later become inextricably associated with music piracy after it was repeatedly sued for copyright infringement by a number of major labels and artists.

The rapper Dr Dre, the band Metallica and the Recording Industry Association of America (which represented 18 member record companies) all filed lawsuits against the company. Napster agreed that it would pay copyright owners $26 million in a settlement in 2001.

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After shutting down in 2002 following bankruptcy, it was bought by Rhapsody in 2011 and transformed into a music streaming service.

Following the recent acquisition, co-founder and CEO of Infinite Reality John Acunto said that acquiring Napster would create "a brighter future" for musicians and fans.

"I firmly believe that the artist-fan relationship is evolving, with fans craving hyper-personalised, intimate access to their favourite artists, while artists are searching for innovative ways to deepen connections with fans, and access new streams of revenue," He added.