Business Combinations (Tables)

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the final allocation of the total consideration to the estimated fair values of the assets acquired and liabilities assumed as of January 18, 2019 (in thousands):

Consideration, at estimated fair value:
Cash	$	1,000
Contingent consideration	11,600
RealNetworks' preexisting 42% equity interest in Napster	2,700
Effective settlement of Napster debt and warrants, held by RealNetworks	6,408
Total consideration	$	21,708
Assets acquired and liabilities assumed, at estimated fair value:
Cash and cash equivalents	$	10,127
Accounts receivable	20,915
Prepaid expenses and other current assets	2,421
Restricted cash	2,322
Equipment, software and leasehold improvements	474
Operating lease assets	2,400
Other long-term assets	77
Deferred tax assets, net	5,932
Intangible assets	23,700
Goodwill	45,520
Total assets acquired	113,888
Accounts payable	786
Accrued royalties and fulfillment	59,036
Accrued and other current liabilities	7,032
Deferred revenue, current portion	3,526
Notes payable	12,211
Deferred tax liabilities, net	6,208
Long-term lease liabilities	1,190
Other long-term liabilities	1,621
Total liabilities assumed	91,610
Total net assets acquired	22,278
Noncontrolling interests	570
Net assets acquired	$	21,708

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

Prior to discontinued operations and held-for-sale accounting treatment, acquired intangible assets had a total weighted average useful life of approximately 8 years, were being amortized using the straight line method, and were comprised of the following (in thousands):

Intangible category	Estimated fair value		Method used to calculate fair value	Estimated remaining useful life
Trade name and trademarks	$	6,800	Relief-from-royalty	15 years
Developed technology	5,900		Excess earnings	4 years
Customer relationships	5,900		Cost-to-replace	3 years
Partner relationships	5,100		Distributor method	8 years
Total	$	23,700

Results of Operations and Carrying Amounts of Assets and Liabilities

The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations at December 31, 2019:

	December 31, 2019
Cash and cash equivalents	$	8,333
Trade accounts receivable, net of allowance	16,740
Other current assets	3,303
Total current assets of discontinued operations	28,376
Net equipment, software, and leasehold improvements	401
Other intangible assets	19,286
Goodwill	45,520
Other non-current assets	2,604
Total assets of discontinued operations	$	96,187
Accrued royalties, fulfillment and other current liabilities	$	65,310
Notes payable	7,331
Total current liabilities of discontinued operations	72,641
Other non-current liabilities	1,843
Total liabilities of discontinued operations	$	74,484

The following table summarizes the net loss from discontinued operations for the years ended December 31, 2020 and 2019:

	2020		2019
Revenue	$	96,185	$	106,311
Cost of revenue	73,318		85,901
Gross profit	22,867		20,410
Operating expenses	24,734		25,789
Operating loss	(1,867)		(5,379)
Other income (expenses)	2,175		(285)
Income (loss) from discontinued operations before income taxes	308		(5,664)
Income tax expense	514		366
Net loss from discontinued operations	(206)		(6,030)
Noncontrolling interests in net income (loss) from discontinued operations	(184)		(1,094)
Net loss from discontinued operations attributable to RealNetworks	$	(22)	$	(4,936)

The following table summarizes the gain recognized for the year ended December 31, 2020 from the sale of Napster:

Net proceeds received(1)	$	22,849
Net assets disposed	(20,935)
Gain on sale of Napster	$	1,914
(1) Proceeds received are net of transaction costs, funds to minority shareholders and fair value adjustments to MelodyVR stock.