Digital entertainment company RealNetworks, Inc. (RNWK) and MTV Networks, a unit of media giant Viacom International, Inc. (VIA), said Tuesday that they plan to spin off their Rhapsody America LLC digital music service joint venture into, Rhapsody America LLC, into an independent company.
"Separating Rhapsody into its own independent company is a significant first step in making RealNetworks a more focused and profitable company," said Robert Kimball, president and acting CEO for RealNetworks.
RealNetworks, currently the majority owner of Rhapsody and its operator, and MTV parent Viacom will restructure their ownership and rights in the joint venture.
After the restructuring, which is expected to close at the end of the first quarter, RealNetworks will no longer have operating control over the venture, and Rhapsody will have no single majority owner.
The move comes after less than a month after RealNetworks founder Rob Glaser stepped down as chief executive officer and Kimball took over as acting CEO.
RealNetworks shares closed Tuesday's regular trading session at $4.16, up 2 cents and gained an additional 43 cents or 10.34% in after hours trading. Viacom shares rose 79 cents or 2.66% to close at $30.49.
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