RealNetworks and MTV Networks, a division of Viacom International, Inc., today announced plans to restructure their digital music service joint venture, Rhapsody America LLC, into a newly formed corporation.
RealNetworks, currently the majority owner and operator of Rhapsody, and Viacom, said that they would restructure their ownership and rights in the joint venture to provide the necessary intellectual property rights to launch the new company as an independent entity.
RealNetworks will also contribute operating capital as part of the transaction. Under the terms of the restructuring, which is expected to close at the end of the first quarter, RealNetworks will no longer have operating control over the venture, and Rhapsody will have no single majority owner.
"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 for RealNetworks. "Rhapsody will be the largest pure play digital music service in the market. We have provided Rhapsody with the right team, and financial and intellectual property assets to succeed in the competitive market for digital music."