How a bankrupt file-sharing site turned into a brand for sale
The Napster that shut down in 2001 and the Napster that exists in 2026 share a name and almost nothing else. The original service, built by Shawn Fanning and Sean Parker in 1999, was closed by court order, and the company behind it went into bankruptcy in 2002.
What went up for sale was not the network. It was the word, the cat-with-headphones logo and a stack of patents. Roxio, a California software company known for CD-burning tools, bought those assets out of the bankruptcy in 2002 for about $5.3 million.
Roxio left the lawsuits behind. The copyright liabilities stayed with the dead company while the trademark walked out clean, which is the whole reason the brand still exists. It was cheap, famous and legally detached from everything it had done.
Roxio relaunched Napster in 2003 as a paid download and subscription store, then renamed the entire company Napster, Inc. The free-for-all it had started moved on without it, to Kazaa and the second wave of file sharing, while the original Napster story became something a marketing department owned.
Why Best Buy paid $121 million for a music brand in 2008
In September 2008 Best Buy agreed to buy Napster, Inc. for $121 million, or $2.65 a share, and closed the deal that October. The purchase came with roughly 700,000 paying subscribers and a store running a distant second to Apple's iTunes.
The retail logic was to sell music subscriptions next to the hardware that played them. It did not work. In October 2011, three years after buying it, Best Buy handed Napster to Rhapsody, the subscription service majority owned by RealNetworks. Terms were not disclosed, and Best Buy took a minority stake in Rhapsody rather than cash.
Rhapsody absorbed the subscribers and retired the Napster name in the United States, keeping it alive in Europe where it tested better than Rhapsody did. In 2016 the company reversed itself and put the Napster name back on the American service, then on everything.
A brand that had been buried was dug up because it was more recognizable than the company that owned it. The same trick explains who owns the Atari name today.
The $70 million VR deal and the crypto owners who came next
In August 2020 MelodyVR, a British virtual-reality concert company, agreed to buy Rhapsody International, by then trading as Napster, from RealNetworks for about $70 million. The deal closed at the end of that year.
The price was less impressive than the headline. Only part of it was cash. A large share was MelodyVR taking on money Napster already owed to record labels and other partners, so the buyer inherited a subscriber base of around 3 million and a bill.
The pitch was to bolt virtual-reality concerts onto a streaming catalog, and that combination never turned into a business. In 2022 Napster changed hands again, to the crypto investment firm Hivemind Capital Partners and the blockchain company Algorand, who announced a web3 relaunch with artist tokens. The price was not disclosed.
Very little of it shipped. By 2025 Napster was what it had been for two decades: a mid-sized music subscription app carrying a name far more famous than its market share.
What Infinite Reality bought for $207 million in 2025
In March 2025 Infinite Reality, a media and technology company, bought Napster for $207 million. That is roughly forty times what Roxio paid for the same trademark in 2002, and it was paid for a service that no longer led anything.
Two months later the buyer took the name for itself. Infinite Reality announced in May 2025 that it would rebrand as Napster Corporation and gather its artificial-intelligence products under a division called Napster AI. The music service was not the reason for the purchase. The word was.
The record labels noticed when the payments stopped. In August 2025 Sony Music sued Napster, its parent Rhapsody International and Infinite Reality, claiming $9.2 million in unpaid royalties and seeking up to $37.5 million more in copyright damages. Sony had terminated its license in June 2025 and said the catalog stayed up anyway.
By the end of 2025 Napster was a streaming service missing a major label, owned by a company that had decided its future was software agents.
What happened to Napster on January 1, 2026
Subscribers learned about it the way this story deserves. On January 1, 2026, playback in the Napster app stopped mid-listen and a notice took over the screen.
"Napster is no longer a music streaming service. We've become an AI platform for creating and experiencing music in new ways," the message read, as reported by Digital Music News in January 2026.
There was no wind-down and no migration inside the app. The notice pointed people to TuneMyMusic, a third-party playlist transfer tool, which in practice meant exporting your library to a competitor.
Twenty-five years after Napster handed the record industry's catalog to anyone with a modem, the brand left licensed music altogether. What remains is Napster Corporation, which sells AI companions and agent software for businesses. The service people actually paid for is gone, and nothing has been announced about bringing it back.
The $3 billion investor who never existed
The oddest part of Napster's current ownership has nothing to do with music. In 2025 the company then called Infinite Reality told reporters it had raised more than $3 billion from an investor it would not name.
In June 2026 federal authorities said the money was never there. The Department of Justice charged Charles J. Cole, a North Carolina man, with fraud and conspiracy, and the Securities and Exchange Commission filed parallel civil claims that also named his attorney, Torben M. Welch. Cole had obtained 239 million shares of Infinite Reality, roughly a quarter of the company, by claiming access to $55 billion in cash.
Regulators say the proof was manufactured, including forged bank statements and a fake website built to mirror a real Malaysian bank.
"Cole, with Welch's assistance, then used the fraudulently obtained shares in Infinite Reality to secure a $1 million loan from a private third-party lender that he never repaid," the SEC said in its 2026 litigation release.
So the ownership answer carries a footnote. A quarter of the parent company's stock went to someone the government says had nothing to pay with.
Frequently Asked Questions
Is Napster still around in 2026?
The Napster name is still in use, but the music service is not. Napster shut down its licensed streaming service on January 1, 2026, and the brand now belongs to Napster Corporation, which sells AI companion and agent software instead of music subscriptions.
Who owns Napster now?
Napster is owned by Napster Corporation, the company called Infinite Reality until May 2025, which bought the brand for $207 million in March 2025. Before that, the Napster name passed through Roxio in 2002, Best Buy in 2008, Rhapsody International in 2011, MelodyVR in 2020 and a crypto group led by Hivemind Capital Partners and Algorand in 2022.
Can you still stream music on Napster?
No. Napster stopped streaming licensed music on January 1, 2026, and directed subscribers to the third-party tool TuneMyMusic to move their playlists elsewhere. Sony Music had already terminated its license in June 2025 and sued Napster that August over $9.2 million in unpaid royalties.