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Music streaming service Napster has hired Jon Vlassopulos as its next CEO. The company also announced a new funding round.
The funding amount wasn’t disclosed, except that it is in eight figures. If you’re like me, you might be wondering why Napster is still alive after it got crushed by the music companies a couple of decades ago. Now that’s a bit of a tale.
Shawn Fanning and Sean Parker started Napster as a digital audio streaming service in 1999. It grew to about 80 million registered users who loved the idea of free music. Napster had more than 100 million MP3 tracks at its height.
I amassed a pretty large collection of my own. But then the likes of Metallica, Dr. Dre, A&M Records, and the Recording Industry Association of America came out one by one against Napster and sued the startup. In mid-2002, Napster declared bankruptcy and I said so long to my free music.
But that wasn’t actually the end. Roxio bought the Napster brand and logos and revived its Pressplay music service as Napster 2.0. In 2008, Best Buy bought Napster. In 2011, Best Buy merged Napster with Rhapsody. By 2016, Rhapsody phased out its brand in favor of Napster. Then it was sold in 2020 to VR concert firm MelodyVR.
And in May 2022, Napster was sold to Hivemind, Algorand, and an investor consortium. The 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 existing investors of the music brand.
“Napster always stayed in the back of my mind and it has never really been improved upon because it was this community,” Vlassopulos said in an interview with GamesBeat. “The way that the music services ended up were more commodity than community. So that was my first touch point with the brand. It then got added to the service that you may remember Rhapsody service that RealNetworks had, which was actually the first streaming service before Spotify. So then, Rhapsody became branded as Napster.”
Napster CEO Jon Vlassopulos.Vlassopulos said that the original music service had DNA as a music disrupter.
“It”s been running along for a number of years as one of the Spotify competitors. And it has changed hands a couple of times,” he said. “Now it’s a streaming music service with 100 million tracks available around the world.”Napster provides streaming music to Sonos and other services. It has a lot of direct licenses with indie musicians. Vlassopulos said the new company has new ambitions thanks to its deep-pocketed Web3 investors and others.
“At Roblox, we created a new music industry in the metaverse,” he said. “With Web3, there’s a massive opportunity for revolution, and a changing of the guard that we had similar to 20 years ago. Like we did on Roblox, fans want to connect with the artists they love and be in a community.”
He isn’t disclosing much about that Web3 strategy just yet, except that it is a hybrid Web2 and Web3 opportunity.
Vlassopulos, the former vice president and global head of music at Roblox, is credited with building the gaming platform company’s music initiatives and bringing artists into the metaverse via interactive, immersive, and hyper social experiences.
“In our early discussions with Jon, we quickly realized his vision of building a fresh, new, and social online music service centered around connecting artists and fans in new ways, and leveraging Web3 technology, aligns perfectly with where we see Napster heading,” said W. Sean Ford, CEO of Algorand, in a statement. “We believe Napster is the perfect brand and platform to lead the next generation of the music industry that goes beyond streaming or avatar-driven virtual concerts. Jon’s strong connectivity with the music industry and vast experience will give us the necessary leadership to make this a reality.”
Because of Vlassopulos’ efforts, Roblox music experiences reached over 100 million fans and set the standard for virtual concerts and music worlds that allow fans to participate in the creative process along with their favorite artists.
“It’s an honor to take on this role and I am thrilled 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 and social and creating new revenue streams for artists,” said Vlassopulos. “I have spent the last three years working hard to establish new, creative, and commercial opportunities for artists in the metaverse and I am looking forward to working alongside 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 fostering, investing in, and acquiring the best Web3 music startups.
“We are excited for Napster to be a central player in the music Web3 ecosystem,” said Matt Zhang, founder and managing partner of Hivemind, in a statement. “We look forward to rallying all the amazinginnovation that has happened to date so we can all collectively drive 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 be successful in Web3. The fund will invest in artists to help support the marketing and launch of the Web3 artist projects globally.
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 then worked for BMG and Bertelsmann in Hong Kong, Tokyo, and New York in the late 90s 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 ran the Digital and Branded Entertainment divisions at Endemol, a leading global TV production company before becoming the CEO of Skyrockit, an award winning mobile entertainment marketing and advertising agency, with clients like vitaminwater, GAP, Virgin Mobile, and Clinique.
In 2019, Vlassopulos joined Roblox as Vice President and Global Head of Music as the company sought 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 tech and a key 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 excited about the news unveiled today and look forward to working with Jon and his team in the months ahead.”
Over time, Napster has paid out billions of dollars to the music industry, and so it has a track record, Vlassapulos said. And so lots of artists and companies and brands want to partner with Napster, he said.
He thinks that 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 has about 150 people in London, Seattle, Germany, France, and Brazil. The main job is to double down on how Napster is a music community, Vlassopulos said.
“There is an industry opportunity 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 businesses based on music and pitch 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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