Rhapsody Being Spun Off by RealNetworks, MTV

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First, RealNetworks dumped Rob Glaser.

Now, the guns are being pointed at Rhapsody.

This has been in the works for months, though Rhapsody is now getting spun off by its joint venture parents, according to details confirmed Tuesday.  Both RealNetworks and MTV Networks are actively dialing down their ownership stakes into minority positions, and offering remaining ownership to “one or more minority stockholders,” as yet unnamed or undetermined.

The move appears to be a trim-the-fat decision.  “Separating Rhapsody into its own independent company is a significant first step in making RealNetworks a more focused and profitable company,” shared Robert Kimball, president and acting CEO for RealNetworks.

As part of the send-off, Rhapsody is contributing $18 million, partly to repurchase international radio business holdings.  MTV Networks is offering a $33 million advertising commitment, and both are lending assets like logos and licenses.

Both will receive seats on the new Rhapsody board, and the spin-off is expected to conclude later this quarter.  “We have provided Rhapsody with the right team, and financial and intellectual property assets to succeed in the competitive market for digital music,” Kimball continued.

Report by Alexandra Osorio.