diff --git a/packager/app/packager_main.cc b/packager/app/packager_main.cc
index 6c68868e09..eff0038aaa 100644
--- a/packager/app/packager_main.cc
+++ b/packager/app/packager_main.cc
@@ -29,13 +29,13 @@
 #include "packager/hls/base/hls_notifier.h"
 #include "packager/hls/base/simple_hls_notifier.h"
 #include "packager/media/base/container_names.h"
-#include "packager/media/base/demuxer.h"
 #include "packager/media/base/fourccs.h"
 #include "packager/media/base/key_source.h"
 #include "packager/media/base/muxer_options.h"
 #include "packager/media/base/muxer_util.h"
 #include "packager/media/chunking/chunking_handler.h"
 #include "packager/media/crypto/encryption_handler.h"
+#include "packager/media/demuxer/demuxer.h"
 #include "packager/media/event/hls_notify_muxer_listener.h"
 #include "packager/media/event/mpd_notify_muxer_listener.h"
 #include "packager/media/event/vod_media_info_dump_muxer_listener.h"
diff --git a/packager/media/base/media_base.gyp b/packager/media/base/media_base.gyp
index 9fb2d46000..283bcef768 100644
--- a/packager/media/base/media_base.gyp
+++ b/packager/media/base/media_base.gyp
@@ -37,8 +37,6 @@
         'closure_thread.h',
         'container_names.cc',
         'container_names.h',
-        'demuxer.cc',
-        'demuxer.h',
         'decrypt_config.cc',
         'decrypt_config.h',
         'decryptor_source.cc',
diff --git a/packager/media/base/demuxer.cc b/packager/media/demuxer/demuxer.cc
similarity index 99%
rename from packager/media/base/demuxer.cc
rename to packager/media/demuxer/demuxer.cc
index 8f59c4676b..6751b29d1d 100644
--- a/packager/media/base/demuxer.cc
+++ b/packager/media/demuxer/demuxer.cc
@@ -4,7 +4,7 @@
 // license that can be found in the LICENSE file or at
 // https://developers.google.com/open-source/licenses/bsd
 
-#include "packager/media/base/demuxer.h"
+#include "packager/media/demuxer/demuxer.h"
 
 #include <algorithm>
 
@@ -95,6 +95,8 @@ Status Demuxer::Run() {
   // info.
   if (all_streams_ready_ && output_handlers().empty())
     return Status::OK;
+  if (!status.ok())
+    return status;
   // Check if all specified outputs exists.
   for (const auto& pair : output_handlers()) {
     if (std::find(stream_indexes_.begin(), stream_indexes_.end(), pair.first) ==
diff --git a/packager/media/demuxer/demuxer.gyp b/packager/media/demuxer/demuxer.gyp
new file mode 100644
index 0000000000..36177edfd4
--- /dev/null
+++ b/packager/media/demuxer/demuxer.gyp
@@ -0,0 +1,42 @@
+# Copyright 2017 Google Inc. All rights reserved.
+#
+# Use of this source code is governed by a BSD-style
+# license that can be found in the LICENSE file or at
+# https://developers.google.com/open-source/licenses/bsd
+
+{
+  'includes': [
+    '../../common.gypi',
+  ],
+  'targets': [
+    {
+      'target_name': 'demuxer',
+      'type': '<(component)',
+      'sources': [
+        'demuxer.cc',
+        'demuxer.h',
+      ],
+      'dependencies': [
+        '../base/media_base.gyp:media_base',
+        '../formats/mp2t/mp2t.gyp:mp2t',
+        '../formats/mp4/mp4.gyp:mp4',
+        '../formats/mpeg/mpeg.gyp:mpeg',
+        '../formats/webm/webm.gyp:webm',
+        '../formats/webvtt/webvtt.gyp:webvtt',
+        '../formats/wvm/wvm.gyp:wvm',
+      ],
+    },
+    {
+      'target_name': 'demuxer_unittest',
+      'type': '<(gtest_target_type)',
+      'sources': [
+        'demuxer_unittest.cc',
+      ],
+      'dependencies': [
+        '../../testing/gtest.gyp:gtest',
+        '../test/media_test.gyp:media_test_support',
+        'demuxer',
+      ]
+    },
+  ],
+}
diff --git a/packager/media/base/demuxer.h b/packager/media/demuxer/demuxer.h
similarity index 100%
rename from packager/media/base/demuxer.h
rename to packager/media/demuxer/demuxer.h
diff --git a/packager/media/demuxer/demuxer_unittest.cc b/packager/media/demuxer/demuxer_unittest.cc
new file mode 100644
index 0000000000..2421f2900e
--- /dev/null
+++ b/packager/media/demuxer/demuxer_unittest.cc
@@ -0,0 +1,22 @@
+// Copyright 2017 Google Inc. All rights reserved.
+//
+// Use of this source code is governed by a BSD-style
+// license that can be found in the LICENSE file or at
+// https://developers.google.com/open-source/licenses/bsd
+
+#include "packager/media/demuxer/demuxer.h"
+
+#include <gtest/gtest.h>
+
+namespace shaka {
+namespace media {
+
+TEST(DemuxerTest, FileNotFound) {
+  Demuxer demuxer("file_not_exist.mp4");
+  EXPECT_EQ(error::FILE_FAILURE, demuxer.Run().error_code());
+}
+
+// TODO(kqyang): Add more tests.
+
+}  // namespace media
+}  // namespace shaka
diff --git a/packager/media/test/packager_test.cc b/packager/media/test/packager_test.cc
index ed428839eb..e45e0ee6a6 100644
--- a/packager/media/test/packager_test.cc
+++ b/packager/media/test/packager_test.cc
@@ -10,7 +10,6 @@
 #include "packager/base/strings/string_number_conversions.h"
 #include "packager/base/strings/stringprintf.h"
 #include "packager/base/time/clock.h"
-#include "packager/media/base/demuxer.h"
 #include "packager/media/base/fixed_key_source.h"
 #include "packager/media/base/fourccs.h"
 #include "packager/media/base/muxer.h"
@@ -19,6 +18,7 @@
 #include "packager/media/base/test/status_test_util.h"
 #include "packager/media/chunking/chunking_handler.h"
 #include "packager/media/crypto/encryption_handler.h"
+#include "packager/media/demuxer/demuxer.h"
 #include "packager/media/formats/mp4/mp4_muxer.h"
 #include "packager/media/test/test_data_util.h"
 
diff --git a/packager/packager.gyp b/packager/packager.gyp
index 09a21fde6e..c91cdc8d28 100644
--- a/packager/packager.gyp
+++ b/packager/packager.gyp
@@ -45,6 +45,7 @@
         'hls/hls.gyp:hls_builder',
         'media/codecs/codecs.gyp:codecs',
         'media/chunking/chunking.gyp:chunking',
+        'media/demuxer/demuxer.gyp:demuxer',
         'media/event/media_event.gyp:media_event',
         'media/file/file.gyp:file',
         'media/formats/mp2t/mp2t.gyp:mp2t',
@@ -89,6 +90,7 @@
       'dependencies': [
         'media/codecs/codecs.gyp:codecs',
         'media/chunking/chunking.gyp:chunking',
+        'media/demuxer/demuxer.gyp:demuxer',
         'media/file/file.gyp:file',
         'media/formats/mp2t/mp2t.gyp:mp2t',
         'media/formats/mp4/mp4.gyp:mp4',
@@ -122,6 +124,7 @@
         'media/chunking/chunking.gyp:chunking_unittest',
         'media/codecs/codecs.gyp:codecs_unittest',
         'media/crypto/crypto.gyp:crypto_unittest',
+        'media/demuxer/demuxer.gyp:demuxer_unittest',
         'media/event/media_event.gyp:media_event_unittest',
         'media/file/file.gyp:file_unittest',
         'media/formats/mp2t/mp2t.gyp:mp2t_unittest',