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Music streaming service Napster has hired Jon Vlassopulos as its new CEO. The company also announced a new financing round.
The funding amount has not been disclosed, except that it is in eight figures. If you’re anything like me, you might be wondering why Napster is still alive after being crushed by the music companies a few decades ago. Well that’s a bit of a story.
Shawn Fanning and Sean Parker started Napster in 1999 as a digital audio streaming service. It grew to about 80 million registered users who loved the idea of free music. Napster had over 100 million MP3 tracks at its peak.
I have collected quite a large collection myself. But then Metallica, Dr. Dre, A&M Records and the Recording Industry Association of America one by one against Napster and sued the startup. In mid-2002 Napster was declared bankrupt and I said so long to my free music.
But that wasn’t really the end. Roxio bought the Napster brand and logos and revived its Pressplay music service as Napster 2.0. In 2008, Best Buy acquired Napster. In 2011, Best Buy Napster merged with Rhapsody. In 2016, Rhapsody phased out its brand in favor of Napster. It was then sold to VR concert firm MelodyVR in 2020.
And in May 2022, Napster was sold to Hivemind, Algorand and an investor consortium. Investors in this new round include Hivemind, Algorand, SkyBridge Capital, Alumni Ventures, Borderless Capital and G20 Ventures, which will accelerate Napster’s Web3 initiatives. Brevan Howard Digital, Arrington Capital and RSE Ventures are also among the music brand’s existing investors.
“Napster always stayed in the back of my mind and it never really improved because it was this community,” Vlassopulos said in an interview with GamesBeat. “The way the music services ended up was more commodity than community. So that was my first point of contact with the brand. It was then added to the service you may remember Rhapsody service that RealNetworks had, which was actually the first streaming service before Spotify So then Rhapsody was branded as Napster.
Vlassopulos said the original music service had DNA as a music disruptor.
“It” has been around for a number of years as one of the Spotify competitors. And it has changed hands a few times,” he said. “Now it’s a streaming music service with 100 million songs available around the world.”
Napster provides streaming music to Sonos and other services. It has many direct licenses with indie musicians. Vlassopulos said the new company has new ambitions thanks to its deep-rooted Web3 investors and others.
“At Roblox, we’ve created a new music industry in the metaverse,” he said. “With Web3, there is a huge opportunity for revolution and a changing of the guard that we had 20 years ago. As with Roblox, fans want to connect with the artists they love and be part of a community.”
He doesn’t reveal much about that Web3 strategy just yet, other than that it’s a hybrid Web2 and Web3 capability.
Vlassopulos, the former vice president and global head of music at Roblox, is credited with building the gaming platform company’s music initiatives and taking artists into the metaverse through interactive, immersive and hypersocial experiences.
“In our early conversations with Jon, we quickly realized that his vision of building a fresh, new and social online music service focused on connecting artists and fans in new ways, and using Web3 technology, is a perfect fit. where we see Napster going,” W. Sean Ford, CEO of Algorand, said in a statement. “We believe Napster is the perfect brand and platform to lead the next generation of the music industry beyond streaming or avatar-driven virtual concerts. Jon’s strong connection to the music industry and extensive experience will give us the leadership needed to make this happen.”
Thanks to the efforts of Vlassopulos, Roblox music experiences have reached more than 100 million fans and set the standard for virtual concerts and music worlds that allow fans to participate in the creative process alongside their favorite artists.
“It is an honor for me to take on this role and I am delighted to lead a company with such a rich history in the music industry. With the advent of Web3 technology, we now have an unprecedented opportunity to connect artists and fans in new, innovative ways, while also making the fan experience more fun, social and creating new revenue streams for artists,” said Vlassopulos. “I have worked hard for the past three years to create new, creative and commercial opportunities for artists in the metaverse and I look forward to working with the amazing Napster team, our current and future partners, labels, artists,
publishers, brands and startups to bring mainstream fans to Web3.”
Napster is also launching Napster Ventures, which will focus on nurturing, investing in and acquiring the best Web3 music start-ups.
“We are delighted that Napster is becoming a central player in the music web3 ecosystem,” Matt Zhang, founder and managing partner of Hivemind, said in a statement. “We look forward to seeing all the great
innovation that has happened so far so that we can all collectively drive the mainstream adoption of Web3 technology for the music industry.”
Algorand, in partnership with Napster, is also launching an Artist Development Fund designed to help artists navigate and succeed in Web3. The fund will invest in artists to support the marketing and launch of the Web3 artist projects worldwide.
Vlassopulos has been a serial entrepreneur, senior executive, established investor and thought leader in the music, gaming and entertainment space for the past three decades. After starting his career as a DJ, he worked for BMG and Bertelsmann in the late 90s in Hong Kong, Tokyo and New York, where he led many of their early digital initiatives and investments, including working on the original Napster 20+ years ago , before joining AT&T Wireless, where he launched the first mobile music service in the US and launched the first mobile apps for many major global brands.
After AT&T, he led the Digital and Branded Entertainment divisions at Endemol, a leading global TV production company before becoming CEO of Skyrockit, an award-winning mobile entertainment marketing and advertising agency, with clients such as Vitaminwater, GAP, Virgin Mobile and Clinique.
In 2019, Vlassopulos joined Roblox as Vice President and Global Head of Music, as the company aspired to be the leader in building metaverse concert experiences. During his tenure, Jon created Roblox’s music strategy from scratch and led the company’s initiatives and partnerships by establishing strategic, long-term relationships with record labels, publishers, management companies, agencies, artists, brands and music startups from around the world.
“Napster has always been at the forefront of music technology and an important partner in helping us deliver Sonos Radio to music fans around the world,” said Ryan Myers, general manager of Sonos Radio, in a statement. “We are thrilled with the news revealed today and look forward to working with Jon and his team over the coming months.”
Over time, Napster has paid out billions of dollars to the music industry, and so it has a track record, Vlassapulos said. And so a lot of artists and companies and brands want to partner with Napster, he said.
He thinks virtual concerts where thousands of people gather in online experiences will be part of the new music metaverse platforms. But the company still has a lot of work to do to figure it all out.
The company employs approximately 150 people in London, Seattle, Germany, France and Brazil. Its main job is to double down on how Napster is a music community, Vlassopulos said.
“There is an opportunity for the industry to build something material and we could have the potential to be a leader for the next era,” he said.
Vlassopulos said the company will use the funding round to evolve. The company will build on music-based companies and present them to its millions of fans who use Napster to listen to music. And Napster will expand music into the Web3 space and help it become both more innovative and mainstream, he said.
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