Were you around for the Napster battle? Simply seeing that brand name sends you right back to the early aughts! It was an era that still echoed with the sounds of dial-up internet and the roiling tectonic shift of digital music. This was the platform that shook up the world’s music industry, but it was also the platform best known for rampant copyright violation. Revived by digital entertainment platform Infinite Reality, Napster’s back—and this time it wants to be more than a nostalgic blast from the past. Might this revival be the first signs of a long overdue change in the right direction—a better deal for artists in the age of streaming? Well, I hope it does, because I believe it can.
Streaming has become the primary way people listen to music today. Yet, let’s not kid ourselves—the payout to artists is abysmal. Today, musicians make less than half a penny per stream. While their work racks up millions of plays, most of them can’t afford to keep the lights on. It's a broken system that needs fixing, and perhaps Napster's return could be a catalyst for change.
The recent acquisition by Infinite Reality for a sweet $207 million was no exception. That demonstrates that there still is faith in the Napster brand, and more importantly, a vision for its future. Hiring Jon Vlassopulos, former CEO of Roblox, as a strategic advisor is a shrewd move. He knows how to create, nurture, and grow a vibrant social ecosystem of users—key to Napster’s long-term success.
What truly has my mind racing is Infinite Reality’s intention to combine extended reality (XR) with artificial intelligence (AI). This isn’t that even-better-same-old same old experience. Their mission is to build the world’s most diverse and creator-friendly social music platform. That might be the defining innovation to truly differentiate Napster from Spotify and Apple Music. Imagine you’re attending a virtual concert, let’s say an Arcade Fire show, with your friends. You’ll be able to chat live with the artists and enjoy music in a whole new way! That’s the promise of this place.
It’s far from exclusive to the music world. Expanding into streaming esports titles – most notably Call of Duty and League of Legends – is a shrewd play. This will help engage a new audience and encourage greater engagement. This diversification will help bring a new user base to Napster. Ultimately, it would increase revenue and help the platform live up to its claims of fairly rewarding artists.
Now, let’s get down to the numbers. At Napster’s current rate, currently $0.01682 per stream with a 1.75% market share. That doesn’t sound too bad, does it? Particularly when you compare it to every other platform, but the devil’s in the details. Without a free tier Napster, so royalties are based directly on 70% of subscription revenue. But that’s a good thing.
Rights holders have acknowledged that past royalties from Napster were a tiny fraction – often less than 1% – of their overall streaming income. That's a stark reminder that even with a seemingly higher per-stream rate, the overall impact can be minimal if the platform's user base is small. And honestly, Napster is a drop in the bucket compared to the big guys. In 2020, they were up to a little more than 1 million monthly active users, as per Music Ally.
So, where does this leave us now—appropriately 31 feet under? Is Napster’s reappearance really a win for artists? Or just yet another streaming platform looking to take its piece of the action? I think it has the potential to be something greater than that. Having a keen focus on XR, AI and esports helps reel in a passionate, eager and willing community. These users are the ones willing to pay for a top-notch experience. With a subscription-based model, Napster can and should put fair compensation for artists first from the very beginning.
Of course, challenges are still there. Rebuilding that trust after the original Napster’s tarnishing reputation is arguably the largest obstacle. And of course, competing with the streaming giants already out there, with their huge catalogs and development and marketing budgets will be a snap. But if Infinite Reality can deliver on its vision of a social, interactive, and artist-friendly platform, Napster could carve out a unique space in the streaming landscape.
I'm not saying Napster is the silver bullet that will solve all the music industry's problems. Its return is a reminder that the recent streaming model isn’t sustainable or fair to all creators. It’s an opportunity to reimagine the entire way artists get paid and how fans engage with music. This time, Napster could actually pen a happier ending to its tale. Now, picture a world where artists are justly compensated for their creativity and efforts! That’s a song I am all too happy to hear!
