How many roads must a man walk down before you call him a man, wondered Bob Dylan in 1963. How many owners must a Napster change hands between before you call it a revolutionary blockchain and web3 platform, wonders Music Ally in 2022. Whatever the number, you can add one to it this morning.
Yes, Napster has been acquired again, this time by two companies from the web3 sector: Hivemind and Algorand. “Dear friends, we are excited to share that we’ve taken Napster Group private, and to bring the iconic music brand to web3,” wrote Hivemind founder Matt Zhang on LinkedIn.
“Volatile market and uncertain times often bring exciting opportunities. At Hivemind, we believe in developing thesis and building enduring value. Music x Web3 is one of the most exciting spaces we’ve come across, and we are thrilled to work with Emmy Lovell and many talents to unlock value for the entire ecosystem and revolutionize how artists and fans enjoy music.”
Lovell has been named interim CEO of Napster, with the former WMG exec stepping up from her previous role as chief strategy officer, having joined the company in April 2021 shortly after its last acquisition by music VR company MelodyVR.
The newly-merged company then delisted from the AIM stock exchange in the UK as part of its plan to relaunch a hybrid music streaming / video / VR service later this year, and then go public again in the US. The new owners appear to be pivoting that strategy with a web3 focus.
There will be plenty to unpack around these plans. For example, Hivemind and Algorand aren’t the only companies involved: they have an ‘investor consortium’ that includes ATC Management, BH Digital and G20 Ventures.
What’s more, this isn’t the only reboot of a music brand that first emerged as a filesharing service that Hivemind is involved with. It’s also one of the investors in the relaunch of LimeWire as an NFTs marketplace, having chipped in to that company’s recent $10.4m token sale.
As it said then: “One of our core theses is in the value in nostalgic web1 and 2 brands combined with the technological potential of web3.” The flippant response would be to wonder whether it’s also putting in calls to whoever owns the brands for The Pirate Bay, BitTorrent and Gnutella…
The serious response, though, is to wonder whether Hivemind and Algorand can make Napster a serious player again in the music streaming space. After its MelodyVR merger, Napster said that it had more than five million users, with a later financial filing revealing its revenues in the first half of 2021 were just $44.2m. Spotify makes that much every 34 hours.
In other words, the new owners’ claim that they are going to “once again revolutionise the music industry” with Napster is a sizeable challenge. Their efforts should at least drive competitive innovation around DSPs, music and web3, going up against the likes of Audius, and perhaps adding an extra prod to the biggest established streaming services to figure out what they want to do with web3 technologies.
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