Merger completed with MelodyVR, Napster today offered the first half-year figures for the combined company.
MelodyVR ended 2020 with 325k users… and a £26m operating loss
Since completing its merger with Napster, music startup MelodyVR has adopted that company’s brand. However, this morning it published financial results for its last full year before the deal, to 28 December 2020.
Bright spots included nearly doubling its users to 325,000, and selling around 40,000 tickets for a streamed Liam Gallagher concert. Less bright spots include, well, the financial results.
MelodyVR’s revenues did grow sharply, from £195k in 2019 to £988k in 2020 (around $1.4m). However, its cost of sales also grew from £1.8m to £5.6m, while administrative expenses grew from £14.2m to £21.5m.
In other words, those costs and expenses combined were more than 27 times the company’s revenues, leading to an operating loss of £26m. However, the newly-merged business remains optimistic.
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MelodyVR reveals next steps in its merger with Napster
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MelodyVR posts £10.5m operating loss for first half of 2020
Virtual reality startup (and future Napster owner) MelodyVR published its half-yearly results this morning. The company generated just £189.9k of revenues in the first six months of 2020.
Royalties and content creation costs amounted to £1.3m, while administrative expenses of £9.4m pushed MelodyVR to a £10.5m operating loss and £10.7m net loss for the first half.
The company’s filing outlined its plans for Napster. “We intend to develop a new application which will enable us to drive revenues by providing users with a premium, recurring, monthly subscription service,” it explained.
MelodyVR raises $15.3m to help fund Napster acquisition
Yesterday we reported on MelodyVR’s planned acquisition of streaming service Napster for $26.3m in cash and stock, and wondered why the company was describing it as a $70m deal. A separate announcement from Napster’s majority owner RealNetworks cleared that up: the deal also saw MelodyVR assuming “approximately $44m in payment obligations, primarily to various music industry entities”.
The cash portion of the deal is $15m, and shortly after our story was published, MelodyVR raised $15.3m from a new share placement – it’s publicly listed on the London Stock Exchange’s AIM sub-market – to fund it. The acquisition is expected to be completed later this year.
MelodyVR boss Anthony Matchett talked to Rolling Stone yesterday about the company’s ambitions to combine livestreamed performances and a streaming music catalogue. “Historically, the major recorded music streamers aren’t content creators. They may get content from the record labels but they don’t create new content like we do,” he said. They may pay massive sums of money to broadcasters for exclusive rights to a show, but again that’s not their content. We come at this from a different angle.”
Music VR startup MelodyVR announces plan to merge with Napster
Music-focused virtual reality startup MelodyVR has announced plans to merge with streaming service Napster. To be clear: MelodyVR is the buyer, although the Napster brand will live on.
“Under the terms of the Merger Agreement, a wholly-owned subsidiary of the Company will be merged with and into Napster (with Napster being the surviving entity),” explained MelodyVR’s announcement to the markets this morning.
“The Company will pay consideration totalling approximately $26.3 million to the vendors of Napster to be satisfied in aggregate by $15.0 million in cash, and the issuance of approximately 200 million MelodyVR shares.”
MelodyVR and Live Nation set for Brixton Academy livestreams
We reported last week on VR music startup MelodyVR’s financial performance in 2019 – £195k of revenues but a net loss of nearly £15m.
The company is continuing to explore new partnerships to grow its business, though, with the latest being a deal with Live Nation in the UK.
The pair will launch a series of live concerts from the O2 Academy Brixton venue in London, with fans able to buy tickets to watch online – in 360 degrees and/or virtual reality via MelodyVR’s app on smartphones and Oculus VR headsets.
MelodyVR’s 2019: £195k of revenues and a £15m net loss
Virtual reality music startup MelodyVR has published its financial results for 2019. The company’s revenues were £195k ($242k) last year, down from £1.2m in 2018.
MelodyVR’s content sales – people paying to watch VR music performances in its catalogue – nearly doubled from £19k to £36.7k, but its revenue from content licensing dropped from just under £1.2m to £158.3k.
With a cost of sales of £1.8m and administrative expenses of £14.2m, MelodyVR reported an operating loss of £15.9m in 2019, and a net loss of just under £15m.
It ended the year with cash reserves of £6.8m, although it has since raised another £10.3m from the sale of shares (it’s a publicly-listed company) to ensure that in accountancy parlance, it’s a ‘going concern’. Whether MelodyVR’s revenues can ramp up fast enough this year to make that still true in 2021 remains to be seen.
Startups explain the lessons they learned working with the music industry
In the Music & Tech Springboard series of videos we’ve produced with the BPI, we’ve heard from collecting societies, lawyers, advisors, accelerators and incubators, and labels about their advice for music/tech startups. But what about hearing from some startups themselves?
That’s what this video does. A group of British startups who’ve all signed licensing deals and/or worked on pilots with music industry rightsholders give us the key lessons they’ve learned along the way, for the benefit of younger companies about to embark on similar journeys.
Get set for Wireless Connect and Electric Blockaloo virtual festivals
Livestreams are all the rage in 2020, but the related ‘virtual concerts’ category is seeing some activity too. Travis Scott’s performances in Fortnite, which attracted 27.7 million people in total, are the obvious example, but there are also experiments happening around virtual reality, as well as other online games.
VR startup MelodyVR has expanded on its partnership with Live Nation subsidiary Festival Republic around the UK’s Wireless Festival. The physical event has been cancelled, but MelodyVR will be putting on “an entire weekend’s worth of unseen performances, exclusive footage, and much more” from 3-5 July instead, including broadcasts in VR from MelodyVR’s studios in Los Angeles and London.