Is streaming profitable? For Rhapsody/Napster, it actually (finally) is.
According to a regulatory filing by RealNetworks, Rhapsody International posted a profit of over $1.6 million in the third quarter, with a record revenue of more than $54 million. Rhapsody International owns Napster music service. This news comes several months after Rhapsody/Napster restructured their San Francisco office, cutting an undisclosed number of job cuts. Back in April, Rhapsody CEO Mike Davis said about the cutbacks,
“As part of our plan to better position Rhapsody/Napster for long-term profitability and accelerated growth in a competitive global market, we have a new, streamlined structure for the company that unfortunately impacts a number of positions across our global offices.”
GeekWire reports that this surprising financial result strengthens Napster against fierce competition from Amazon, Apple Music, and Spotify. You can check out the company’s numbers below in a handy GeekWire infograph.
As the numbers show, overall revenue for the music service has increased. Nevertheless, they still posted significant losses.
Back in 2015, Rhapsody posted an annual loss of $35.5 million, on revenues of $202 million. The company rebranded itself as Napster here in the States back in June. The company made this move to create “one global brand” as well as a longtime music service to counter music streaming rivals.
When the company rebranded itself as Napster, the company had 3.5 million subscribers. These numbers pale in comparison with Spotify’s 40 million and Apple Music’s 17 million paid subscribers. It’s currently unknown how many users are paying for Amazon Music Unlimited, however.
RealNetworks owns a 42% stake in the music streaming service. This is reportedly the “first significant profit for the music service since the company spun out of RealNetworks as a standalone company more than six years ago.” Back then, RealNetworks and Viacom spun off the Rhapsody music subscription service.