In a major development to a story that first broke back in November, RealNetworks and MTV Newtworks announced late yesterday that they are spinning off their Rhapsody America music streaming joint venture into a new, independently-operated company.
The restructuring is expected to be completed by the end of the first quarter.
According to documents filed with the SEC, Real, MTVN and one or more minority stockholders will hold shares of less than 50% of the new company. The reamaining stock will presumably be available to make or attract outside investments. Real will contribute $18 million in cash to launch the new venture, and take back control of its international radio business. MTVN will contribute $33 million in advertising, but its previous commitment of $111 million in ads will be canceled.
Will independence set up Rhapsody to be a more efficient, focused company that’s more attractive to investors, or finally cast the troubled service into the sunset?