Music sharing app Napster is being purchased by 3D technology company Infinite Reality for $207 million, according to media reports on Tuesday.
This comes 25 years after the company was founded, disrupting the music industry with its new model for the digital age. Napster was eventually shuttered in 2001 amid mounting legal battles, and filed for bankruptcy the following year. However, it looks like the brand is coming back from the dead with the latest acquisition.
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Infinite Reality CEO John Acunto told CNBC in an interview that the one-time file-sharing phenomenon will be used for marketing in the metaverse. Infinite Reality, a company specializing in virtual 3D spaces, plans to enable music fans to experience concerts and listening parties together in these immersive environments while also providing musicians and labels a platform to sell both physical and virtual merchandise.
“When we think about clients who have audiences — influencers, creators — I think it’s very important that they have a connected space that’s around music and musical communities,” Acunto said. “We just don’t see anybody in the streaming space creating spaces for music.” Acunto also added that he believed there was no better name than Napster to “disrupt.”
Napster was originally launched in 1999 by Shawn Fanning and Sean Parker. It allowed PC users to swap MP3 files, which could be played in a media player like Winamp, and build collections of popular digital music for free.
“It was a bold idea, ahead of its time,” Acunto noted, talking about Napster and how he and other investors “dreamed of launching a paid, legal version of the platform,” back in the day.
Heavy metal band Metallica sued Napster as did the Recording Industry Association of America. They accused Napster of allowing users to share pirated files. Current CEO Jon Vlassopulos told CNBC that Napster’s assets were sold off to a series of owners after bankruptcy.
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“For me, this is more than a deal — it’s a full-circle moment,” Acunto wrote in a LinkedIn post, announcing the acquisition.
Infinite Reality was founded in 2019 and raised $3 billion in January from anonymous investors. Virtual concerts have already been happening in the metaverse through apps like Meta’s AmazeVR Concerts. With Napster entering the virtual events space alongside competitors, its music industry legacy may prove to be an advantage.