Rhapsody's Trio of Announcements

Rhapsody's offering DRM-free MP3s in its store, launching Rhapsody for Verizon, and trying to re-ignite a syndication strategy that has fizzled so far. I wish Rhapsody would be more aggressive with ad-supported initiatives, but "the economics are challenging," according to Rhapsody execs.

DRM-free paid music downloads are inevitable, and just under a quarter of adults Jupiter surveyed (Figure 6) said they'd buy more digital music without DRM. That figure breaks 40% for more serious fans and spenders. With MP3s, non-Apple stores can sell songs that actually play on iPods without a hassle. Finally, we'll see competition on things like merchandising, deals, exclusives, etc. instead of random technology choices. But the competitors will have to work, and somebody's going to have to spend some serious advertising $$. Rhapsody claims we'll see the fruits of its MTV and Yahoo partnerships, for the store and the Rhapsody subscription service.

Rhapsody's MP3 download store claims a large catalog (5 million songs - no U2), and somewhat better -- to my eyes -- artist and genre pages than Apple's or Amazon's. Pricing is comparable to Apple but less aggressive than Amazon. Sampling a full track is restricted to the same 25 plays a month Rhapsody has been offering for some time.

I believe that phones will play a significant role in digital music. But I'm not sure they'll actually expand the market -- particularly for subscription services -- or just compete for ear-time with iPods. Let's see just how aggressively Verizon markets both Rhapsody and paid downloads, and whether they can make cell phones as cool as iPods.

Syndication is one of the key themes of 21st century Internet media. But Rhapsody's work with Yahoo and, ironically, MSN hasn't shown much to-date. Yahoo, MTV, and iLike have tremendous potential as partners. Yahoo has a big, broad audience that already spends time with it for music videos, MTV is showing a little more online mojo lately, and iLike is a Facebook perennial (if there is such a thing). Again, we're going to have to see just how deeply Rhapsody content and services are woven into these.