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Rhapsody Passes 1 Million Subscriber Mark

December 24, 2011

The longest-running subscription-based music service announced Thursday that they had finally surpassed the one-million paid subscriber milestone.

Seattle-based Rhapsody, which is also celebrating its 10th anniversary this month, had for years sustained about 800,000 subscribers, the Associated Press (AP) reported on December 22. However, thanks to a pair of recent transactions, they have seen a spike in those numbers.

“In August, its service began being bundled into a cellphone plan for Android phone users on carrier MetroPCS. The plan includes unlimited data, talk, text and music for $60 a month,” the AP reported. “In October, it gained other subscribers through its purchase of Napster from Best Buy.”

Jon Healey of the Los Angeles Times says that Rhapsody has also formed a partnership with Verizon Wireless. Under that deal, Verizon subscribers can subscribe to the music service as a $10 per month add on. Healy calls bundling deals like the ones with Verizon and MetroPCS “the Holy Grail for subscription services.”

Rhapsody President Jon Irwin told the wire service that the company has what they believe “is a sustainable business model.” Subscribers to the service are allowed to listen to unlimited music for $5 per month on computers or $10 per month on all devices, and Rhapsody also offers a free trial.

Irwin’s service is currently facing some tough competition, including Spotify, which was 2.5 million subscribers worldwide, according to what the company’s CEO told the Los Angeles Times.

While Healey points out that Spotify offers “a large amount of on-demand music for free as a way to attract people to its paid services,” Irwin told the AP that “the weight of the costs of the free music they´re giving to people to get them to convert is clearly dominating their income statement“¦ I don´t have that expense line item that they have.”

Irwin told reporters that Rhapsody “is focused on growing use on mobile devices. Mobile listening is already the most popular, accounting for 40 percent of listening, compared with 32 percent on computers.”

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Source: RedOrbit Staff & Wire Reports



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