[f1000]

Real expands Rhapsody's reach
Flagship service now Web-based, Mac-compatible

By Scott Banerjee, MarketWatch
Last Update: 12:07 AM ET Dec. 5, 2005


SAN FRANCISCO (MarketWatch) -- In an effort to expand the reach of its flagship subscription music service Rhapsody, RealNetworks Inc. is rolling out a new Web-based version and introducing compatibility with Macs and Linux-based devices.

The move is Real's first major announcement related to its music initiatives since settling its lawsuit with Microsoft in October. See full story.

On Monday, Real will start offering a Web-based service called Rhapsody.com, which allows existing Rhapsody subscribers and new users access to streaming music via browsers like Internet Explorer, Firefox and Safari. Previously, Rhapsody subscribers had to access the service by launching software on Windows-based PCs.

"The approach has a lot of merit," said Jupitemedia analyst Joe Wilcox. "Real is taking Rhapsody beyond the [PC software] and opening it with respect to other platforms, plus it brings the first real subscription music service to Mac and Linux-based products."

As of the company's last quarterly report, Real claims 1.3 million paying subscribers; Napster reported 448,000 subscribers in November. Yahoo does not break out its music subscription numbers.

Napster chief executive Chris Gorog said in the company's most recent earnings conference call that the company is planning its own Web-based subscription music product.

The larger chunk of revenue from digital music, however, still comes from paid downloads of individual tracks. Apple Computer Inc. (AAPL:

72.63, +1.03, +1.4%) , which sells individual music tracks to PC and Mac users for 99 cents via its iTunes music store, is far-and-away market leader. Before Real's announcement, Mac users could not access any subscription music services.

Wilcox says that the "sweet spot" for subscription music service consumers is an 18 to 24 year-old. Folks within this demographic, says Wilcox, are the among the same people who grew up acquiring music content for free through the former file-trading service, Napster, as well as peer-to-peer Internet services.

Dan Sheeran, Real's senior vice president consumer services, says the Linux compatibility also gives Rhapsody a new reach into devices such as mobile phones, televisions and connected digital media devices. Sheeran also mentions that Rhapsody can now tap Mac users - many of whom are music aficionados or influential within the music industry.

In the coming weeks, Rhapsody.com will be also available within Microsoft's Windows Media Player 10. Afterwards, as a part of the Microsoft settlement, the MSN Network will be using Rhapsody Web Services to integrate Rhapsody into its MSN Search, MSN Messenger and MSN Music services.

In its earnings report in October, RealNetworks' quarterly music revenue grew 39% to $25 million for the quarter and now represents more than 30% of the company's sales. See full story.

Real shares have gained more than 50% since settling the lawsuit with Microsoft in an agreement that would pay the company cash equivalents of $761 million and help promote its online music and gaming services. Real shares also got a boost after Yahoo Inc. announced later that it would double the price of its own subscription music service for portable devices.

Real will also be offering a downloadable upgrade to its existing Rhapsody software. For Rhapsody To Go subscribers, the new version will feature improved functions for transferring tracks to portable music players, including those from SanDisk Corp. (SNDK:

Scott Banerjee is a reporter for MarketWatch in San Francisco.

http://www.marketwatch.com/news/stor...&siteid=google

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http://www.rhapsody.com

[Severed Hand of Skywalker]

OK, now how is it better than iTunes?

[f1000]

Originally Posted by Severed Hand of Skywalker

OK, now how is it better than iTunes?

It's not; it's just different.

I'm sure that if Rhapsody gains marketshare, then Apple will add a subscription service to iTunes as well. Real will lose either way.

[Mithras]

I tried it; not bad. I'm intrigued but not yet sold on the subscription idea. Paying $120/year for 5 years and having nothing to keep at the end of it still rubs me the wrong way. (note: i do not have cable TV, either) But on the other hand, having an "infinite jukebox" does sound nice...

[rozwado1]

Are there any companies out there that offer both ways (download and subscription)?

Seems like a no-brainer to offer both and tap both market segments...

[BasketofPuppies]

Almost all of them.

[rozwado1]

Well, then let's get an iTunes subscription service going and take even more of the market!

[production_coordinator]

I think it would be great... for a couple months/years, but after that time, I would feel like I'm just throwing money away...

[f1000]

Comcast offers free Rhapsody Radio for its subscribers, but I can't figure out how to get it to work.

I guess I'll have to boot up the old Virtual PC.

[BasketofPuppies]

Originally Posted by rozwado1

Well, then let's get an iTunes subscription service going and take even more of the market!

I'm beginning to wonder if not having a subscription service is part of Apple's business model.

Think about it. The iTunes Music Store effectively forces iPod owners to replace their iPods with iPods or buy all the music they previously downloaded again should they replace it with a competing player. If Apple added a subscription service (and iPod firmware updates to support it), if you replaced your iPod with a competitor's player, you could cancel your subscription to Apple's service, subscribe to, say, Napster To Go, and download the same music you previously downloaded from Apple's service with no financial penalty. (Granted, it would take a great deal of time to download all that music again, but that's a one time thing.)

[ambush]

from the worst service ever with the wirst interface ever
U.S. Only
We're sorry. We have detected that you are outside of the United States. This service is currently only available to residents within the United States.

Oh my god.

[SuvsareRetarded]

I have a lot of friends who have it, and they set up massive playlists, let their computer play all night, and record the stream, then cut it up later. But don't tell the RIAA.

[moonmonkey]

Membership is limited to the population of a single country? This is the most stupid thing I have ever seen.

[f1000]

I got Comcast Rhapsody Radio to work. Neat, but the music doesn't sound CD quality. It's got some of the harsh metallic overtones characteristic of Real's compression codecs.

What's cool is that you can jump to the next song within a radio "station."

[ShotgunEd]

subscription services suck

people who subscribe to them suck more

[hardcat1970]

well, i started a trial period on Emusic and rhapsody today. Emusic gave me 50 free downloads which are quite good, however, not enough main stream music, i decided to cancel it and it was easy.

Not the case with rhapsody. i search one of the artist that was missing from itms, when i browse all the albums that he has ever released, most of them weren't available to listen or download. I felt like i was fooled, so i decided to cancel my trial, but then it linked me to another page and asked me to state my reason for canceling. And after that, it gave me a number to call to cancel it.

why can't i cancel this god**** service online when I signed up online? I bet they will ask me thousand questions when I call them up to cancel my subscription.

And Real Network complain apple's business model with this?

[turtle777]

I consider myself spammed !

[Salty]

I like the iTMS, cause it means I can buy albums I find in stores for cheaper when they're on the iTMS, that said sometimes I can't find em, so I don't end up subscribing for music that I won't listen to anyway. Sure I probably spend a bit more this way, but I know that if I want to later I still own the music.

[turtle777]

Hey Mauri, please cue "rat's ass" pic. Thx.

-t

[11011001]

Can you put the music on your iPod?

[Kerrigan]

Lately I've become anti-DRM. I used to think that the ITMS was god's gift to music geeks, but I've run into a lot of problems with their DRM. For example, why won't any of my purchased songs play on my iPod anymore? Why can't I listen to half of my music on my newly bought computer? I've only xfered those songs to 2 other computers, should I still be allowed to put it on a new one?

I never buy things from the iTMS anymore, because I know that after a couple of years there is a good chance that I will not be able to listen to a purchased song, for whatever reason.

[Salty]

That's why I'm waiting for JHymn to update so i can de-DRM all my music. I mean I don't do piracy and it's legal to do up here so I'm just hoping they can get around to it, cause I like to be able to make sure that if I say want to put it on someone else's computer for a while while I'm there or something I can and I don't have to worry about de-authorizing it, or if it's not connected to the internet and stuff.

[hardcat1970]

Originally Posted by Kerrigan

Lately I've become anti-DRM. I used to think that the ITMS was god's gift to music geeks, but I've run into a lot of problems with their DRM. For example, why won't any of my purchased songs play on my iPod anymore? Why can't I listen to half of my music on my newly bought computer? I've only xfered those songs to 2 other computers, should I still be allowed to put it on a new one?

I never buy things from the iTMS anymore, because I know that after a couple of years there is a good chance that I will not be able to listen to a purchased song, for whatever reason.

you should be allowed to install up to 3 computers. I guess DRM is inevitable because that is beyond apple's control. Hey, the record companies want to DRM cd too!

Personally i don't have problem with itms, the only time i feel inconvenient is when i want to share itms purchased music with my brother but i have to burn it to a cd then re-ripped to mp3. I would guess that is against the record companies' rules.

I am really disappointed the way real's business model. Even emusic let you download their music without using their download manager software. And emusic provide an easy way to opt-out their trial period.

But i am not so sure about real. I am going to call them this afternoon and find out what happened.

I can see why real sucks!

[baw]

In other news, Napster is about to go out of business.

[DarwinX]

Originally Posted by Kerrigan

Lately I've become anti-DRM. I used to think that the ITMS was god's gift to music geeks, but I've run into a lot of problems with their DRM. For example, why won't any of my purchased songs play on my iPod anymore? Why can't I listen to half of my music on my newly bought computer? I've only xfered those songs to 2 other computers, should I still be allowed to put it on a new one?

I never buy things from the iTMS anymore, because I know that after a couple of years there is a good chance that I will not be able to listen to a purchased song, for whatever reason.

As far as computers go I would deauthorize all of your computers and then reauthorize one at a time. You shoudl be able to get 3 no problem.

As far as the iPod. I had the issue of iTMS songs not playing, I finally figured out that even though iTunes was stating "iPod Update Complete" the hard drive on my iPod was still spinning. I previously had been detatching it quickly after this message and then my iTMS songs didn't work on my iPod. However, once I waited for all HD actviity to finish, it worked properly. Just my 2 cents.

As for the topic. Does this work, or work well? Besides the issues in cancelling? If it doesn't, it just strikes as a way for Real to be able to say "well we have Mac support so why don't you open the iPod!?!?!" They are losers all the way around.

[Obi Wan's Ghost]

Subs suck.

[wdlove]

I think that I will stick with iTunes.

[turtle777]

Originally Posted by wdlove

I think that I will stick with iTunes.

Good choice.

-t