RealNetworks has announced that it has doubled its stake in music-streaming service Napster to 84%, after agreeing a deal with co-owner Columbus Nova Technology Partners.
RealNetworks is paying $1m in cash up-front, a further $14m “over time subject to certain conditions”, although the final bill could reach $40m if Napster is sold (or has a “similar liquidity event”) within five years if the 42% stake acquired is valued at more than $60m.
“Napster has delivered five consecutive quarters of positive operating income and generated over $14 million in operating income in the first three quarters of 2018,” said RealNetworks boss Rob Glaser. “This success was achieved by pivoting to a B2B strategy focused on selling the Napster platform as a service. We think Napster’s future is very bright.” Napster’s CEO Bill Patrizio will continue to run the business as an independent subsidiary. Napster may be profitable, but as we reported last August, its revenues have been falling since its peak in mid-2016.