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Rhapsody Joint Venture
9 Months Ended
Sep. 30, 2013
Equity Method Investments and Joint Ventures [Abstract]  
Rhapsody Joint Venture
Rhapsody Joint Venture
RealNetworks initially formed in 2007 a joint venture with MTV Networks, a division of Viacom International Inc. (MTVN), to own and operate a business-to-consumer digital audio music service known as Rhapsody. Prior to March 31, 2010, we held a 51% interest in Rhapsody and MTVN owned the remaining 49%. On March 31, 2010, restructuring transactions involving Rhapsody were completed, and as a result, effective March 31, 2010 RealNetworks owned approximately 47% of Rhapsody. Subsequent to the restructuring transaction, we account for our investment in Rhapsody using the equity method of accounting for investments.
As of September 30, 2013 we owned approximately 45% of the issued and outstanding stock of Rhapsody.
RealNetworks continues to provide certain operational transition services to Rhapsody. These transition services are expected to be completed in 2013, and are discussed further in Footnote 19, Related Party Transactions.
We recorded our share of losses of Rhapsody of $2.6 million and $6.2 million for the quarter and nine months ended September 30, 2013, respectively. Our share of losses of Rhapsody for the quarter and nine months ended September 30, 2012 were $1.6 million and $4.1 million, respectively.
The carrying value of our Rhapsody investment was $12.7 million as of September 30, 2013.
Summarized financial information for Rhapsody, which represents 100% of their financial information (in thousands):
 
 
Quarters Ended
September 30,
 
Nine Months Ended
September 30,
 
2013
 
2012
 
2013
 
2012
Net revenue
$
35,190

 
$
36,389

 
$
103,831

 
$
109,368

Gross profit
7,800

 
9,266

 
24,412

 
28,757

Net loss
(5,621
)
 
(3,424
)
 
(14,812
)
 
(9,031
)