From MP3 to Web3 to now 3D, Napster gets a new owner

Beating a dead horse to a 4-4 beat

Napster, the original file-sharing troublemaker that shook the music industry, is about to change hands once again in yet another attempt to drag the brand into relevance.

Since the original Napster was shut down by a US court in 2001 over copyright infringement, the brand has changed hands several times. Now, Infinite Reality (iR) has agreed to acquire what's left of it for $207 million. 

This time around, iR says it plans to transform Napster into "a social and interactive music platform" by fusing traditional music streaming with its "immersive technology and audience network of digitally native fans," which "prioritizes active fan engagement over passive listening."

iR claims it's building tools for artists to monetize fan engagement, including branded 3D spaces for virtual gigs, physical and virtual merch sales, AI-powered customer service and community management for "greater personalization," gamification to "increase fan engagement and loyalty," and brand sponsorship tie-ins.

This sounds suspiciously familiar - Mark Zuckerberg made a similar pivot to the metaverse back in 2021, and we've all seen how well that played out. 

Infinite Reality describes itself as "an innovation company powering the next generation of digital media and ecommerce through spatial computing, artificial intelligence and other immersive technologies." Whether it can succeed where others have stumbled is another matter. iR isn't even the first to try dragging Napster into the future after Roxio scooped up the brand in a 2002 bankruptcy fire sale.

Napster: The brief, misguided history of a brand resurrection

The first group to try doing what iR is attempting was UK-based MelodyVR, which bought the Napster brand from RealNetworks in 2020 for the much lower cost of $70.6 million. Following this acquisition, MelodyVR rebranded itself as the Napster Group and announced plans to "combin[e] immersive visual content and music streaming" on a reimagined Napster platform, which never came to fruition.

In 2022, Napster was purchased by a pair of Web3 players, Hivemind and Algorand, who also promised to reinvent digital music through blockchain and fan ownership. Their version, too, quietly fizzled.

"We are excited to share that we've taken Napster private, and to bring the iconic music brand to Web3," Hivemind founder Matt Zhang said of the purchase. "Music x Web3 is one of the most exciting spaces we've come across, and we are thrilled … to unlock value for the entire ecosystem and revolutionize how artists and fans enjoy music."

A little less than a year later, in March 2023, Napster Music Limited, the UK entity overseeing Napster's operations, entered creditors' voluntary liquidation amid ongoing financial difficulties.

Now, it seems, Infinite Reality wants to have a go at much the same blockchain-and-virtual-experiences model that at least two previous owners have tried — and failed — to make work in just five short years. How, exactly, Infinite Reality thinks it will succeed where MelodyVR and a pair of crypto firms couldn't - and with an arguably dead-end metaverse approach - is, frankly, a mystery. 

This ain't your daddy's Napster

Infinite Reality disagreed with the assessment that it's trying to just slap yesterday's failed metaverse tech on top of a struggling music streaming brand. Instead, Infinite Reality told us it believes the world is on the verge of a period of rapid internet evolution - a statement pretty typical of companies in the Web3 space, with some added AI hype to boot, naturally. 

"[The evolution] has been slow, for sure," an Infinite Reality spokesperson told us. "But AI is likely to speed it up."

Infinite Reality argues that "clunky hardware and difficulties scaling … on the web" have made immersive technology less practical in the past, though we note "the past" in terms of failed metaverse and immersive tech is all very recent. 

Nonetheless, "we believe we are living in a time of rapid evolution of the internet - powered by AI and advancements in spatial computing and computer vision," Infinite Reality said.

To be completely honest, to us elder Millennials and Gen Xers who made Napster a household name, this relaunch isn't really for us: iR is looking to capitalize on the emergence of Gen Z as an untapped group of new consumers. 

"Gen Z is estimated to make up about 100 percent of consumer growth from now until 2035," an iR spokesperson told us, adding that "the traditional 2D grid-based experience no longer meets modern consumer [read: Gen Z] expectations." 

"We're meeting a massive and influential population of consumers on their terms," iR continued. "And music, like gaming, is a perfect use case." 

Infinite Reality isn't the first to think that way. Whether it will have more luck reviving a brand whose peak predates its target audience's reading age is anyone's bet. ®