MTV, RealNetworks spinning off Rhapsody
RealNetworks will give up operating control of music serviceNEW YORK -- RealNetworks and Viacom's MTV Networks will spin off digital music service joint venture Rhapsody America, with the former giving up its majority holding and operating control.
The music service will operate independently. RealNetworks, currently the majority owner and operator of Rhapsody, and Viacom will restructure their ownership stakes and rights to enable the change. RealNetworks will also contribute operating capital as part of the deal, which is expected to close at the end of the first quarter.
"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 at RealNetworks. "Rhapsody will be the largest pure play digital music service in the market."
In a regulatory filing, RealNetworks and Viacom said they will each own slightly less than 50% under the planned transaction. They currently own 51% and 49%, respectively.