Ripping CDs in the 90s to live VR in the 20s
27th August 2020 |
It’s the turn of the century. The world is seemingly gripped by the fear of the potential “Y2K Bug” but at the same time hugely optimistic about the start of a new millennium.
In Australia your humble editor is just 16 years old, and the most exciting thing on the horizon for me was the 2000 Sydney Olympics next year for which we’d already secured tickets for.
There was a New Year’s Eve party with friends, down the coast at a mate’s holiday house. But it wasn’t all that different from the years before.
There was something a little different though at this New Year’s Eve party. And it was the CDs that were getting played on my mate’s CD player.
You see in the years prior, if you wanted to play a CD it was typically a CD that you’d bought from HMV, Sanity or one of the other big music shops.
Note: yes we had HMVs in Australia. There was a massive one in the middle of Melbourne’s city centre (known as “the CBD”) in the main shopping precinct, Bourke Street.
I loved buying CDs, everything from Vanilla Ice’s “Ice Ice Baby” (don’t hold that against me) to Red Hot Chilli Peppers’ “Californication” and Guns N’ Roses’ “Use Your Illusion”.
However, at the New Year’s Eve party from 1999 to 2000, the CDs that were getting played weren’t ones bought from HMV or Sanity.
Instead it was a mix of CD-Rs and CD-RWs.
These were writeable CDs (CD-R you could record on to once; CD-RWs you could record on to, erase and re-write several times).
This was the era when your CD stack was full of legit CDs but also CD-Rs and CD-RWs – typically just a blank disc with some kind of permanent marker scribble on it to identify the music contained within.
The ability to “write” on to CDs was something reasonably novel – but to a 16-year-old tech-head like me, it was amazing.
I could download songs from the internet, write them to CD and then play them on CD players. I didn’t have to go to HMV to buy an entire album for one or two songs. I didn’t have to go and buy a single and have stacks of them piled up around the place.
I could just search through the greatest gift to music lovers, a program called Napster, download the song and write it to CDs.
And that New Year’s Eve we had several CD-Rs that were just full of playlists with the songs that were popular and liked at the time.
But what made this possible wasn’t the CDs that were writeable. It was the software that allowed us to search and download and share MP3s on the internet.
Napster, a music sharing service, had burst on to the scene, exploded in popularity and become the place to find the latest songs you wanted to “burn” to CD.
Napster single-handedly changed the music industry. It changed the very concept of what could be done on the internet. It lay the foundations for the world’s streaming services like Spotify that we use today.
Dare I say, but if Napster never existed, neither would Spotify. That is the significance of Napster on the world.
Of course, in the early days, the ripping of songs and the peer-to-peer sharing of it was deemed to be a breach of copyright. And in one hugely famous case, the global mega-band Metallica sued Napster for breach of copyright (amongst other things).
Metallica won. And Napster was forced to remove all Metallica content from its network. With Metallica winning, other artists followed in and had a crack at Napster. Soon enough Napster was floundering under the sheer weight of legal cases against it, settlements paid out and they filed for bankruptcy in 2002.
Napster was huge. And they disrupted the entire music industry. There’s even a compelling argument that Napster helped the music industry. But that kind of massive change was too frightening for major artists and record labels.
Hence the music industry killed it. Well, they killed the original P2P network – but it didn’t kill Napster the name or the music service. It didn’t kill the idea that music could be shared online and consumed in a way that didn’t necessarily have to involved physical media.
In the years since, Napster (the brand) has traded hands a few times since. It became a legitimate music service and was bought by Best Buy in 2008. It then merged with the first music streaming service Rhapsody, and more recently re-branded so the Rhapsody/Napster operation has been exclusively known and operating as Napster once again.
It’s been quite the journey, but Napster is still alive and kicking and is a legitimate global music streaming service with a music library of over 80 million tracks.
And now, Napster is joining forces with Melody VR (LSE:MVR) by way of a merger.
Rhapsody International Inc. which owns Napster and operates the Napster platform, has agreed to a merger with Melody VR.
Melody VR’s strategy has always been to build the business based on a subscription model, much in the same way Spotify operates. Obviously, Melody VR’s unique VR content offering separates it from the pack. But now combining Napster’s music library gives it a much more compelling reason for consumers to join the platform to get not just VR content but a massive music content library as well.
In order to satisfy the $26.3 million purchase price, Melody VR did a bookbuild raising $15.3 million at 3.5 pence per new ordinary share.
Hence you’ll see the MVR stock price pull back to 3.5 pence for the time being. But as the stock is currently suspended relating to the acquisition and the placement of the new shares via the bookbuild, there’s not going to be trading in the stock.
When the stock relists and begins active trading again, it could be volatile.
But I see this as a great deal for Melody VR. Napster is a global name. Its brand awareness is huge. The value alone from that has the potential to lift Melody VR, Napster and their new platform that they’ll integrate to new heights.
Napster already has a large user base of both direct consumers and business customers. For example, BMW uses Napster as the platform that “powers” its European BMW Music service which is integrated into BMW cars infotainments systems.
I think the deal is a big win and I expect the combined entity to take some huge leaps forward as the merger completes, to integrate the companies and then move forward as a far more comprehensive and valuable business.
Right now, Melody VR is still suspended. But when it trades again, at its current price it’s under our buy limit of 5p and is an active buy. This deal reaffirms our long view on Melody VR’s potential and it will remain an active buy upon active trading with the buy limit of 5p still in place.
Using Napster back in 1999, there’s no way I could have foreseen the troubles it’d face, the name living on, it passing hands and its resurgence as a streaming service soon to be integrated into a live VR music company… but here it is.
As an early Napster user, it’s quite something to see Napster live on, and now have the potential to dethrone the likes of the Spotify and deliver the next generation of music content – through VR – to the masses.
Exciting times!
Regards,
Sam Volkering
Editor, Frontier Tech Investor
