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Infinite Reality acquires Napster for $207M: can it succeed where others failed?

by March 26, 2025
written by March 26, 2025

Napster, the pioneering brand that once symbolized digital music piracy, has been acquired for $207 million by tech firm Infinite Reality.

The deal, announced Tuesday, marks yet another chapter in the evolution of the Napster brand, which has changed hands multiple times over the past decade.

Infinite Reality, a company focused on extended reality (XR), artificial intelligence, and immersive digital experiences, plans to transform Napster from a traditional streaming service into a social-first platform where fans can directly engage with artists.

The acquisition aligns with a broader trend in the music industry, where companies are increasingly looking to monetize fan engagement beyond streaming revenue.

Infinite Reality CEO John Acunto told CNBC that the company envisions Napster as a marketing tool for the metaverse, allowing fans to interact with their favorite artists in virtual 3D spaces.

Infinite Reality’s plans for Napster: Virtual concerts and interactive fan experiences

Infinite Reality’s ambitions for Napster go beyond conventional music streaming.

The company plans to integrate social features, digital merchandise sales, and immersive virtual experiences, creating an environment where fans can participate in listening parties, attend concerts, and interact with artists in customized virtual spaces.

Acunto described the concept as “Clubhouse times a trillion,” referring to the social audio platform that saw a surge in popularity during the pandemic.

He emphasized the need for dedicated virtual spaces designed specifically for music communities.

“When we think about clients who have audiences—whether they are influencers, creators, or musicians—we see a huge opportunity to build connected spaces around music,” Acunto told CNBC.

“We just don’t see anybody in the streaming space doing this right now.”

The company’s vision also includes monetization opportunities for artists. Musicians and labels will be able to sell both physical and virtual merchandise within Napster’s ecosystem.

Infinite Reality Co-Founder and Chief Innovation Officer Jon Vlassopulos, who will continue as Napster’s CEO, highlighted the potential for artists to craft unique digital experiences.

“Imagine stepping into a virtual venue to watch an exclusive show with friends, chatting with your favorite artist in their virtual hangout as they drop a new single, and directly buying their exclusive digital and physical merch,” Vlassopulos said.

Napster’s long journey from piracy to legitimacy

While the Napster brand still carries echoes of its controversial past, today’s Napster is a far cry from the peer-to-peer file-sharing network that disrupted the music industry in the late 1990s.

The original Napster, co-founded by Shawn Fanning and Sean Parker in 1999, was shut down in the early 2000s following a wave of lawsuits from record labels and artists.

In 2011, streaming service Rhapsody acquired Napster’s brand and later rebranded itself under the name in 2016.

Since then, Napster has been acquired multiple times, each time reflecting shifting technology trends.

In 2020, virtual reality firm MelodyVR purchased Napster for $70 million, hoping to turn it into a hybrid music and live-streaming platform.

Two years later, crypto-focused companies Hivemind and Algorand acquired Napster, aiming to integrate blockchain and Web3 technologies into its business model.

However, those efforts failed to gain significant traction.

Infinite Reality’s acquisition represents yet another attempt to redefine the brand’s place in the digital music landscape.

Infinite Reality’s broader ambitions

Infinite Reality has been aggressively expanding its digital entertainment footprint.

The company, which was founded in 2019 and is building a headquarters in Fort Lauderdale, Florida, has made several high-profile acquisitions in recent months, including the Drone Racing League, virtual reality retail brand Obsess, and metaverse development firm Landvault.

Earlier this year, Infinite Reality claimed to have raised $3 billion at a $12.25 billion valuation.

However, the company has not disclosed its investors, stating that they wish to remain anonymous.

Beyond music, Infinite Reality also operates in esports and digital entertainment.

The company owns esports teams that compete in popular titles such as League of Legends and Call of Duty, and it intends to use these platforms to cross-promote music experiences on Napster.

Acunto sees the music industry shifting toward direct-to-fan engagement and believes Napster’s transformation will help artists capitalize on new revenue streams.

“I firmly believe that the artist-fan relationship is evolving, with fans craving hyper-personalized, intimate access to their favorite artists, while artists are searching for innovative ways to deepen connections with fans and access new streams of revenue,” he said.

Can Infinite Reality succeed where others have failed?

Napster’s rebranding efforts over the years have largely failed to make a lasting impact on the industry.

While Infinite Reality’s plans for metaverse integration and virtual fan experiences are ambitious, it remains to be seen whether they will resonate with music audiences.

The music industry has already seen several attempts to merge streaming, virtual reality, and Web3 technologies with mixed results.

While platforms like Roblox and Fortnite have successfully hosted virtual concerts, many blockchain-based music ventures have struggled to gain mainstream adoption.

Napster, however, still has a well-known brand name and a history of disrupting the industry.

With Infinite Reality’s resources and its focus on interactive digital experiences, this latest acquisition could be the boldest attempt yet to redefine Napster for the modern era.

For now, the company is betting big on the idea that music fans want more than just streaming—they want immersive, community-driven experiences that allow them to feel closer to the artists they love.

The post Infinite Reality acquires Napster for $207M: can it succeed where others failed? appeared first on Invezz

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