Seattle-based Rhapsody International today announced its first outside investment ever, pouring money into an electronic dance music (EDM) company.
Rhapsody International, the parent company to Rhapsody and Napster, led a Series B round in Dubset Media Holdings, a startup founded in 2008 that helps DJs monetize their work.
“This investment, the first for Rhapsody International, demonstrates our commitment to EDM,” Rhapsody International CFO Ethan Rudin said in a statement. “Through our work with Dubset, we’re supporting the development of alternative revenue streams for EDM artists and labels.”
Dubset Media operates three companies: MixSCAN, which uses patented technology to identify and track royalty licenses; MixBANK, a royalty clearing house and content storage hub; and The Future FM, a content distribution platform that lets DJs share their work.
“DJs want to be protected and ensure rights holders are properly compensated from any form of monetization,” Dubset Media CEO Bob Barbiere said in a statement. “Dubset have actively engaged the biggest labels and artists in develop the technologies that resolve rights and are beneficial to all. This is truly a win-win for the entire music industry…DJs, rights holders, and consumers.”
Terms of the deal were not disclosed. It will be interesting to see how Rhapsody, founded in 2001, incorporates content from The Future FM as it faces tough competition from companies like Spotify, Pandora and Rdio.
The combined subscriber base of the Rhapsody and Napster music services has grown to more than 1.7 million globally, achieving a 63 percent year-over-year increase. But Rhapsody International has so far struggled to turn its growth into profits, posting a net loss of $14.6 million on revenue of $140.6 million in 2013.
Rhapsody International, based in downtown Seattle, is privately held. But RealNetworks, which spun off Rhapsody as an independent company in 2010, still owns about 45 percent of the music service, a stake that requires RealNetworks to report the results of its Rhapsody investment publicly.