June 30, 2008, 7:09 am Rhapsody Runs Hard Just to Stay in Place
By Saul Hansell NY Times http://bits.blogs.nytimes.com/2008/06/30/rhapsody-runs-hard-just-to-stay-in-place/ When Rob Williams, the senior vice president for music at Real Networks, came by last week to talk about a bunch of announcements by Rhapsody, the music service jointly owned by Real and Viacom, I have to confess that I felt a bit sorry for him. As I've written, I have a soft spot for the idea of listen-to-anything subscription music services. But they have essentially failed in the market. Mr. Williams said Rhapsody has very roughly speaking about three-quarters of a million subscribers, including more than 100,000 purchased from Yahoo. That is about flat from a year ago, and the numbers are trending down, in part because of the economic slowdown. A music service is a discretionary purchase, he said, and something that is usually the first to get go when the budget gets tight. On the bright side. Rhapsody's deal to offer its service in conjunction with Verizon Wireless, which was announced last year, is finally available. But the actual specifications make it far from a game changer. First, the price is $14.99 a month, no break from the price Rhapsody has been charging for its regular subscription that works with a portable music player. Many people in the industry think that if subscription music is going to take off, the price must fall by half to two-thirds. That $15 a month, moreover, doesn't buy an experience that takes advantage of Verizon's cellphone network. To listen to music, you need to download files onto your computer and then transfer then by way of a cable onto a music-capable Verizon phone. Even though you are paying for unlimited music, there is no way to get that music over Verizon's data network. Verizon has long been willing to sell music over its wireless network at $1.99 a track. The new deal with Rhapsody adds a minor twist: If you buy a copy on your phone, you have the right to download a second copy in the unprotected MP3 format. (Verizon previously allowed users to download a second copy of a song in a protected format.) Mr. Williams said he hoped that the service would have a lower price and more capabilities soon. The price is set by the music labels, which have been resistant to a lower cost subscription offering, he said. Both the labels and Verizon, moreover, have an interest in promoting lucrative $1.99 over the air downloads. Rhapsody is also converting its per-track download store completely to MP3 files with all the major labels and a bunch of independent ones. The only real surprise is that it took nine months after Amazon.com introduced the same thing. But then again most of the labels are refusing to sell unprotected tracks to Apple in an effort to encourage other music stores to thrive. I'm not so sure how much traction Rhapsody can get as a download store. Its software has a nice recommendation engine, and it has decent promotion through its deals with MTV and Yahoo. But I don't see the big draw. Rhapsody, moreover, is selling all tracks at 99 cents, compared with Amazon, which discounts some to 89 cents. And in a third small move, Real is updating its Rhapsody 25 free streaming service to take advantage of social networks, blogs and other distributed media. Rhapsody 25 allows users to listen to the full track of any song in its catalog on their computers, up to 25 songs a month. It uses this to promote its subscription service and now its MP3 store. It has created tools to allow people who use this service to let visitors listen to music on their Web sites and social network pages. And it has a deal to integrate this capability with iLike, the social network add-on. All this seems the best that is possible for Rhapsody: A lot of time spent negotiating with labels to create products that are still expensive and don't have the features that can get people excited. Maybe after another year of treading water with monthly subscriptions, the labels and Verizon will finally allow Real and others to offer a more interesting and attractive service. But if the labels really wanted to sell music in ways and at prices people want, wouldn't they have done so already? As I said, I feel sorry for Rob Williams and pretty much everyone else whose business depends on cutting deals with music labels (or cellphone companies for that matter). ================================================= George Antunes Voice (713) 743-3923 Associate Professor Fax (713) 743-3927 Political Science Internet: antunes at uh dot edu University of Houston Houston, TX 77204-3011 ******************************* * POST TO [EMAIL PROTECTED] * ******************************* Medianews mailing list [EMAIL PROTECTED] http://lists.etskywarn.net/mailman/listinfo/medianews
