From Piracy to the Metaverse: Napster Plots Its Crypto Comeback

Napster, the notorious peer-to-peer file-sharing service that once upended the music industry, has been acquired by digital media and ecommerce startup Infinite Reality for $207 million. The purchase marks yet another attempt to revitalize the storied brand, this time through immersive Web3 and AI-driven experiences aimed at Gen Z consumers.

Launched in 1999 by Shawn Fanning and Sean Parker, Napster became a household name by allowing users to freely share MP3s. The service ignited fierce legal battles with major record labels and artists, including Metallica, and was ultimately shut down in 2001 after a court ruling found it liable for copyright infringement. Despite filing for bankruptcy the following year, the brand has lingered—changing ownership multiple times and morphing from a piracy platform into a legitimate, though relatively obscure, streaming service.

Infinite Reality, or iR, is the latest in a line of companies betting that the Napster brand still holds cultural value. According to a press release, the firm intends to transform Napster into a "social music platform" that blends streaming, community features, AI tools, and 3D virtual environments.

“By acquiring Napster, we’re paving a path to a brighter future for artists, fans, and the music industry at large,” said iR CEO John Acunto. “This strategic move aligns with Infinite Reality’s vision to lead an internet industry shift from a flat 2D clickable web to a 3D conversational one.”

iR’s vision includes offering artists the ability to create custom 3D virtual venues, host listening parties, and sell both physical and digital merchandise. The company also plans to integrate AI-powered tools for customer service and fan interaction, gamified fan engagement features, and analytics dashboards for artists to track their audience behavior. Music acts will have access to iR’s built-in digital audience, including fans of esports properties like the Drone Racing League and competitive gaming teams.

“Imagine stepping into a virtual venue to watch an exclusive show with friends, chat with your favorite artist in their own virtual hangout as they drop their new single, and be able to directly buy their merch,” said Jon Vlassopulos, CEO of Napster, who will stay on and take a broader role at Infinite Reality.

Napster's legacy as a disruptor continues to be a talking point for its new owners. Joseph Menn, author of All The Rave, told the Los Angeles Times that the original platform helped birth a wave of tech entrepreneurs who saw music not just as content, but as a powerful tool for audience data and marketing.

Despite this legacy, several attempts to modernize Napster have failed. In 2020, UK-based MelodyVR acquired the brand from RealNetworks for $70.6 million and rebranded as the Napster Group. The company aimed to combine immersive visuals with music streaming, but the platform never fully materialized. In 2022, blockchain firms Hivemind and Algorand took Napster private with promises of a Web3 music revolution—an effort that quietly collapsed the following year when Napster’s UK entity entered liquidation.

Now, Infinite Reality enters the scene with deep pockets and broader ambitions. The company claims a $12.25 billion valuation and says it raised $3 billion in January, though it declined to name its investors. Backers reportedly include Liberty Media, T-Mobile Ventures, and celebrities such as Steve Aoki and Imagine Dragons.

Founded in 2019, iR has been actively acquiring tech and entertainment firms, including the Drone Racing League, virtual retail company Obsess, and gaming infrastructure group Landvault. It is now turning its attention to the music industry with the goal of revamping streaming to align with what Acunto calls “the immersive era.”

“Our belief is that fans crave hyper-personalized, intimate access to their favorite artists, while artists are searching for innovative ways to deepen connections and access new revenue streams,” Acunto told CNBC. “We’re creating the ultimate music platform where artists can thrive in the next wave of digital disruption.”

Still, skepticism remains. The promise of the “metaverse”—a virtual space that blends entertainment, commerce and social interaction—has yet to pan out for many tech companies. Meta’s pivot to virtual reality platforms has been widely criticized for underdelivering on lofty promises. Critics of iR’s approach note that Napster’s brand appeal may not resonate with Gen Z consumers, who were toddlers—or not yet born—when Napster first made headlines.

Even so, iR insists its approach is different. “Gen Z is estimated to make up about 100 percent of consumer growth from now until 2035,” a company spokesperson told The Register. “We’re meeting a massive and influential population of consumers on their terms.”

For Napster’s current subscribers, the platform remains active with over 110 million licensed tracks and availability in 34 countries. Whether it can transition from niche streaming service to a full-fledged Web3 music hub remains to be seen.

If history is any indicator, transforming Napster into a new kind of music-tech powerhouse won’t be easy. But Infinite Reality is betting that its fusion of AI, 3D environments, and Gen Z targeting can finally give the brand the relevance it's been chasing for the past two decades.