Rhapsody Goes its Own Way

Today's post is by FMC Communications Intern Peter Haugen.
For the past seven years, Rhapsody was partnered with RealNetworks and MTV, but, as of Tuesday morning, the music subscription service is flying solo. In other words, Rhapsody, which has been around for the better part of a decade, is now officially labeled a “start-up.” Again.
So why, exactly, did the company decide to go its own way? Did Rhapsody, like many people who chose to end a relationship, simply need its space?
Apparently, “space” was a big factor in Rhapsody’s decision. According to WIRED's Eliot Von Buskirk, “[RealNetwork’s] gaming and other divisions had caused delays with Rhapsody’s development, as tends to happen in large companies where multiple departments share the same resources.” Buskirk also noted that, by breaking away from RealNetwork, Rhapsody will be able to avoid such logistical problems and perhaps “keep pace with fresher competition.”
Yet “keeping pace” seems to be getting harder and harder to do.Today's post is by FMC Communications Intern Peter Haugen.
For the past seven years, Rhapsody was partnered with RealNetworks and MTV, but, as of Tuesday morning, the music subscription service is flying solo. In other words, Rhapsody, which has been around for the better part of a decade, is now officially labeled a “start-up.” Again.
So why, exactly, did the company decide to go its own way? Did Rhapsody, like many people who chose to end a relationship, simply need its space?
Apparently, “space” was a big factor in Rhapsody’s decision. According to WIRED's Eliot Von Buskirk, “[RealNetwork’s] gaming and other divisions had caused delays with Rhapsody’s development, as tends to happen in large companies where multiple departments share the same resources.” Buskirk also noted that, by breaking away from RealNetwork, Rhapsody will be able to avoid such logistical problems and perhaps “keep pace with fresher competition.”
Yet “keeping pace” seems to be getting harder and harder to do.
When Rhapsody started offering its subscription service way back in the digital music stone age (2001), it didn’t have many rivals to worry about. Aside from a number of startups, Rhapsody has to deal with that organization that Forrest Gump once called “that fruit company.” Keep in mind that Apple had an entirely different business model in that they offered single-price downloads, while Rhapsody offered subscription on-demand listening (MP3s and so-called "tethered" downloads — files that work as long as you keep up your subscription — came a bit later).
At this stage in the game, however, Rhapsody seems to be in a position where they had to adapt in order to stay aboard the innovation train. And they've already been busy: yesterday Rhapsody displayed a new app for Android mobile platform that, will allow users to stream all of Rhapsody’s tracks (and there are nearly ten million of them). A similar app already exists for the iPhone.
Another significant development — and this might just be the one music fans care about most — Rhapsody is reducing its monthly price by a third, from $14.99 to $9.99. Over the last year, the number of Rhapsody subscribers dropped from 800,000 to 675,000. With emerging competitors like MOG and Apple's recently acquired Lala, not to mention the looming spectre of Spotify, this price change is key to Rhapsody's goal of attracting and retaining young people who have never known a world where you paid fifteen dollars for an album. Or, apparently, a music subscription service.
Comments
2 comments postedPersonally I have been really
Submitted by BJ (not verified) on September 18, 2010 - 7:35pm.Personally I have been really happy with Rhapsody, and now also enjoy it on my i-Phone. I find the price reasonable and the selection is getting better by the day, although still lacking here & there. I just wonder how adequately they compensate the artists. It is the artists and their work that I care about. The platform is a distant second.
I have Rhapsody also on my
Submitted by Nicholas Foster (not verified) on November 30, 2010 - 5:26am.I have Rhapsody also on my unlocked iphone 4. Glad to know they are no longer bound by RealNetwork's resources. I guess we can see faster improvements with Rhapsody in the coming years.
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