SEATTLE (CelebrityAccess MediaWire) — RealNetworks and MTV Music Networks have revealed their intention to restructure their joint digital music service Rhapsody, by spinning it off into an independent operation.
RealNetworks will also contribute operating capital as part of the transaction. Under the terms of the restructuring, which is expected to close at the end of the first quarter, RealNetworks will no longer have operating control over the venture, and Rhapsody will have no single majority owner.
"Separating Rhapsody into its own independent company is a significant first step in making RealNetworks a more focused and profitable company," said Robert Kimball, president and acting CEO for RealNetworks. "Rhapsody will be the largest pure play digital music service in the market. We have provided Rhapsody with the right team, and financial and intellectual property assets to succeed in the competitive market for digital music."
Rhapsody is a streaming digital music service that offers unlimited access to a catalog of about 9 million tracks and is available via computer or through mobile apps on devices such as the iPhone and Android phones and other smart phones as well as through Verizon Wireless devices. Debuting in 2001 as the first streaming music service, Rhapsody has also begun to sell DRM fre mp3 tracks directly as an option from their streaming service.
Although it was once the dominant player in digital media delivery, RealNetworks has struggled in the face of increasing competition from giant competitors such as Microsoft and Google. – CelebrityAccess Staff Writers