Rhapsody Spins Free, Lowers Subscription Fees

Subscription music service Rhapsody has finally completed the process of spinning loose of its dual corporate parents, RealNetworks and Viacom. As part of the celebration, Rhapsody has rolled out a new logo…but potential customers are probably more interested in Rhapsody’s new pricing: $10 per month for Rhapsody Premiere, an all-you-can-handle music streaming to PCs, home audio systems, or (single) mobile device that can handle it.

The new monthly pricing represents a one-third price cut: Rhapsody had been charging $14.99 per month for its Rhapsody To Go plan, which enabled subscribers to tap in from both home audio systems as wel as mobile applications and selected MP3 players. Rhapsody Online was $12.99, and offered access only from PCs and home audio systems. The new $10/month Rhapsody Premiere plan will apparently work with a single mobile device; subscribers on the $15 Rhapsody To Go plan will (which supports multiple mobile devices) will be kept on that plan unless they specifically switch.

Rhapsody is among the most successful of the online streaming music services: it launched all the way back in 2001, and currently has an estimated user base of around 700,000 users along with a wide range of device support from players like Sonos, plus the company has unveiled mobile clients for the iPhone and Android. However, subscription music services have yet to develop the market traction of the download-to-own model exemplified by Apple’s iTunes Music Store: so far, music lovers seem to want to be able to purchase tracks and have them forever, rather than pay a month fee for online access to a library of millions of tracks.

The newly independent Rhapsody is headed up by John Irwin, and says it believes it can be profitable by the end of the 2010 calendar year. However, the service does face challenges: when it launched its iPhone application back in September, it got a surge of interest from iPhone users, but comparatively few stayed with the service after the free one-week trial.

Rhapsody may also face a direct challenge from Apple in the near future: industry watchers speculate Apple’s acquisition of Lala.com in December 2009 means the Cupertino company is working on its own cloud-based music service.

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