Source: Reuters

Recently, Sony Music Entertainment (SME) filed a lawsuit in federal court in Manhattan against Rhapsody International, the parent company of the streaming service Napster, for $9.2 million in licensing fees and unpaid royalties. Additionally, the lawsuit includes a claim for potential damages of $36 million due to copyright infringements. According to Sony’s allegations, Napster has defaulted on its payment obligations for over a year while continuing to stream music from its catalog.

The acquisition of Rhapsody International by the Web3 startup Infinite Reality for $207 million in March 2025 triggered a clause in the licensing agreements between Napster and Sony that allowed the latter to terminate those contracts. However, Sony chose not to do so on the condition that Rhapsody establish a four-part payment plan, with the first three installments due within the two months following the acquisition.

Despite the agreement, Sony claims that Rhapsody has not made any payments on its outstanding balance or additional licensing fees since the acquisition. In May 2025, Sony sent a letter to Rhapsody notifying them of the breach of contract, and in June, the licensing agreements with Napster were terminated. However, the lawsuit contends that Napster has continued to stream music from Sony’s catalog, which constitutes willful copyright infringement.

Sony Music’s lawsuit seeks to recover damages of up to $150,000 for each infringed work, which could amount to a total of $36 million based on a list of 240 songs identified in the court filing. This case is a continuation of recent legal controversies surrounding Napster, which has faced accusations of late royalty payments from various distributors and record labels, as well as previous lawsuits from SoundExchange for unpaid royalties.

Since its founding in 1999 as a peer-to-peer file-sharing platform, Napster has encountered numerous legal challenges related to copyright issues. Over the years, it has changed ownership and evolved into a legal streaming service. Sony’s current lawsuit highlights the complexities and ongoing tensions at the intersection of music, technology, and intellectual property in the digital age.