Does anyone remember Napster? The app that ended the music industry at the turn of the millennium? The great executioner of record labels and the father of streaming music? It's back! Or at least it's back on the stock market. After almost 22 years, the app that was bought by the virtual reality show and event streaming company MelodyVr in 2020 for approximately US$70 million (R$365 million), is preparing to make its debut on the stock exchange from London at the end of February.
According to MelodyVR, the idea is to enter the alternative investment market from February 26th to raise around £10 million (R$73 million) and expand its operations in the streaming sector. The period also coincides with the general meeting of investors scheduled to vote on changing the company's name to Napster.
The estimate is that, together, the market value of MelodyVR/Napster is approximately £100 million (pounds), around R$733 million.
Master move
MelodyVR's interest in the brand lies in the weight of its legacy. In the early 2000s, Napster was a data sharing P2P has transformed the music market as we know it. If it weren't for its technology, we wouldn't have seen the popularization of mp3 format, nor the concept of sharing as it is widespread in today's digital culture.
The company paid dearly for its innovation, suffering a series of lawsuits from artists and record labels for copyright infringement that eventually resulted in its demise. Among the best-known cases is the lawsuit filed by Metallica drummer Lars Ulrich for the company's improper sharing of the band's songs.
Lars Ulrich, drummer and leader of the band Metallica, was one of the artists who led the crusade against Napster in the early 2000s. Photo: Ralph Arvesen/Wikimedia Commons/CC
Years later, Napster returned to the market as a streaming application from the Rhapsody International network, appearing as a competitor to platforms such as Spotify and Amazon Music in the United States.
Now, after almost two decades, the company's name could be the center of a new revolution through the platform created by MelodyVR that allows users to watch shows and events in augmented reality through VR glasses and headsets.
Given that Covid-19 vaccination has not yet reached the expected level to eradicate the coronavirus among countries, perhaps this is the only alternative to enjoy our favorite bands safely in the near future.
Investor queue
In an interview with The Guardian, MelodyVR CEO Anthony Matchett said they are excited about transforming the platform into a new Napster. According to the executive: “this funding will support the company’s development throughout 2021”.
Among those betting on the service's return is Nice & Green, a Swiss equity investment fund that has already secured about £6,5 million (R$29 million) in Napster shares. The other £3,5 million offered in this first round will be distributed in shares open to retail investors.
Anthony Matchett, founder of MelodyVR, hopes to create one of the largest streaming companies in the world with the Napster merger. Photo: MelodyVR/Napster
In addition to Nice & Green, another company that will also hold shares in Napster is Realnetworks, the former owner of Rhapsody International that was purchased by MelodyVR in 2020. As part of the sale agreement, the company will have a 10% stake in the platform's future business.
For the past six months, the two companies have remained separate, with the streaming services' headquarters remaining in their home city of Seattle, while MelodyVR's headquarters are in London. Now, with the merger of the services, the expectation is that the new company will direct all of its activities to the United States, becoming one of the biggest streaming businesses in the world.
Expansion of the catalog for shows
Even not being as big as Spotify, it is estimated that Napster currently generates revenue of approximately $130 million per year. There are around 6 million users who pay $9,99 or £9,99 per month.
MelodyVR's operations are more modest. The company makes around £1 million a year from its concert offerings, which for now have remained focused on the electronic music market.
Breaking the style barrier may have been another reason that led Melody to acquire the platform, since Napster has 90 million licensed tracks and a subscriber base that doubled from 3 million to 5,7 million between 2019 and 2020.
Despite being advantageous, the merger of the companies may not happen. It will depend on the result of the vote by current investors on February 25.
Through which channels you reach those people, classic and out of the box. The Guardian
