Rhapsody Launches DRM-Free Music Store

Rhapsody has decided to embrace the iPod, launching a new store that offers more than 5 million DRM-free music tracks in MP3 format.

RealNetworks’ streaming music service Rhapsody—developed in partnership with MTV—has long offered an all-you-can-eat music subscription service starting at $12.99 a month. However, the biggest hurdle to broad adoption of Rhapsody has been one simple problem: none of the service’s DRM-protected tracks with work with Apple’s market-dominating iPod. Today, Rhapsody hopes to crack into the iPod market with its Rhapsody MP3 Store—dubbed “Music Without Limits”—offering more than 5 million tracks from the four major music labels and a ton of indies. Most tracks are priced at $0.99, more albums cost $9.99, and because they’re in DRM-free MP3 format, the tracks will work seamlessly with virtually any media player or music-capable phone on the market. Yes, even the iPod.

“Until now, legal digital music has suffered from severe limitations on where consumers could buy it and how they could use it,” said RealNetworks CEO Rob Glaser, In a statement. “‘Music Without Limits,’ fixes those problems and will make digital music easier and more valuable for consumers.”

In an interesting move, the Rhapsody MP3 Store encourages music discovery by enabling full-length song playback, rather than restricting samples to the 30-second snippets available via most services. Rhapsody will also be offering MP3 downloads via Verizon’s VCAST mobile networking and Yahoo; Rhapsody has also partnered with iLike and will be powering music purchases via MTV Web sites.

RealNetworks is also leveraging its relationship with MTV to launch a substantial advertising campaign to promote the news service, expecting to spend more than $15 million in the third quarter of 2008 to let folks know about the service, and a total of $50 million over the course of the next year. As part of that promotional service, Rhapsody is giving away a free album (really, a $9.99 credit) for the first 100,000 people who sign up for the Rhapsody MP3 Store by July 4.

Rhapsody’s move is another sign that the music industry is increasingly conformable with letting users buy DRM-free music: although the technology certainly hasn’t vanished from the digital download market—and no doubt labels would rapidly embrace DRM technology that didn’t annoy or criminalize customers—since EMI first broke ranks with the rest of the major labels in mid-2007 to offer DRM-free tracks, no labels have ceased to offer DRM-free tracks, and now music from all major labels—and thousands of indies—is available from various online outlets without DRM.