RealNetworks said Tuesday that it intends to spin off its Rhapsody music service into a separate company at the end of the first quarter.
The deal was struck in conjunction with MTV Networks, a division of Viacom, DMS Holdco, a subsidiary of Viacom, and Rhapsody, according to an 8-K filing filed Tuesday with the SEC. Real owns 51 percent of Rhapsody, with Viacom owning 49 percent; after the spinoff, both companies will own an equal number of shares, but not a majority position.
Real will contribute $18 million, the Rhapsody brand and other assets for stock, while MTV will add $33 million in terms of an advertising commitment, canceling a previous $111 million ad commitment.
“It makes Real a more focused and profitable company, and from Rhapsody's perspective gives them the independence and flexibility to succeed in a highly competitive market," Bill Hankes, a spokesman for Rhapsody, said in an interview.
The deal was struck in conjunction with MTV Networks, a division of Viacom, DMS Holdco, a subsidiary of Viacom, and Rhapsody, according to an 8-K filing filed Tuesday with the SEC. Real owns 51 percent of Rhapsody, with Viacom owning 49 percent; after the spinoff, both companies will own an equal number of shares, but not a majority position.
Real will contribute $18 million, the Rhapsody brand and other assets for stock, while MTV will add $33 million in terms of an advertising commitment, canceling a previous $111 million ad commitment.
“It makes Real a more focused and profitable company, and from Rhapsody's perspective gives them the independence and flexibility to succeed in a highly competitive market," Bill Hankes, a spokesman for Rhapsody, said in an interview.
