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June 30, 2008

Rhapsody and Viacom in $50 million attempt to take on iTunes. Real says DRM is dead

Filed under: iphone — Tags: , , , , , — admin @ 2:23 pm

iPod made new friends today. Rhapsody, Real Networks and Viacom joint venture, launched ambitious program which will allow users to download MP3 file onto their iPods. This is a 180 degree shift in Rhapsody strategy in addressing Apple's dominance in music business.

Rhapsody may be finally getting it's acts together. To their credit, getting to be the music store back-end to MTV's music Web sites and iLike, one of the most widely used music applications on social networking site Facebook, is a huge deal. iTunes has done little to reach out to social networking based music consumption. This could be smart move for Rhapsody.

iTunes command whopping 70% of the digital music market. Amazon, Walmart, Napster and many other online intiatives are eyeing that market.

Industry analysts have come to an agreement that DRM is dead. Music business models have to go beyond restriction based models and embrace creative bundling to protect margins.

Read the complete press release:

SEATTLE ? June 30, 2008 ? Rhapsody®, the leading digital music service from RealNetworks®, Inc. (Nasdaq RNWK) and MTV Networks, today launched its "Music Without Limits" initiative. This strategy is designed to turbocharge the digital music industry in three ways, by:

- Accelerating the move away from proprietary Digital Rights Formats by making music from all major labels available in the DRM-free and interoperable MP3 format;
- Empowering music fans to conveniently stream full-length songs, and buy MP3s, anywhere they want including the most popular music sites and social networks on the Web;
- Integrating digital music directly with mobile phones through a deep partnership between Rhapsody and Verizon Wireless.

"Until now, legal digital music has suffered from severe limitations on where consumers could buy it and how they could use it," said Rob Glaser, chairman and CEO of RealNetworks. "’Music Without Limits,' fixes those problems and will make digital music easier and more valuable for consumers. Rhapsody is proud to be partnering with some of the most innovative companies of our time, including: iLike, Yahoo!, MTV Networks, and Verizon Wireless, to connect consumers with digital music wherever they are and however they want it."

New MP3 Store with Full-Length Song Playback
Beginning today, consumers can purchase MP3 music from Rhapsody and its partners that is free of the digital rights management (DRM) software that restricts how and where people can play their music. Any song or album purchased at www.rhapsody.com/mp3 can be played on any MP3 player, even an Apple iPod.

Visitors to the Rhapsody MP3 Store can enjoy a complete discovery experience by listening to full-length songs instead of the 30-second samples found on other sites. And purchased tracks and albums can be seamlessly downloaded into Rhapsody, RealPlayer or iTunes.

The Rhapsody MP3 catalogue will include more than 5 million songs from all four major music labels ? Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI ? and an extensive number of independent labels. The Rhapsody MP3 Store places a strong emphasis on the digital album with merchandising centers for "new album releases," "old favorites," and "who's on tour." Most albums will sell for $9.99 and tracks for $.99.

Leveraging the marketing power of Rhapsody's relationship with MTV Networks, Rhapsody is launching today a "Music Without Limits" advertising campaign that includes broadcast, online and print advertising. Rhapsody anticipates using media worth more than $50 Million in the next year and worth more than $15 million in the third quarter alone. As part of this campaign, Rhapsody is giving away a free album to the first 100,000 people who sign up for the new store until July 4th. See separate press release on the Rhapsody promotion for more details or http://offer.rhapsody.com/mp3/promo/album.

Sample and Purchase Music on Most Popular Music Sites and Social Networks
Because many consumers would prefer to sample and purchase music directly where it is discovered, Rhapsody has joined forces with some of the most important and influential music companies on the Web, including iLike, Yahoo! and MTV Networks to enhance people's listening experience and give them the ability to conveniently purchase the music they've just discovered.

Beginning in the weeks ahead, consumers will be able to enjoy full-song playback (up to 25 songs per month per person) whether they are on Yahoo! Music or MTV.com, CMT.com or VH1.com, and they will have the ability to seamlessly go from playing a song on those sites to purchasing a DRM-free version of that music.

"MTV.com, VH1.com and CMT.com are destinations for some 25 million music fans every month who are seeking the latest music and music news across a range of genres, from pop to hip-hop, alternative to rock and country," said Courtney Holt, executive vice president of digital music and media for MTV Networks' Music Group. "With the Rhapsody MP3 Store, we're giving our audience the means to load up on all the music they love while they're on our sites ? yet another way in which we're weaving Rhapsody into the fabric of all of our programming across all of our screens."

"Yahoo! Music has a long history of supporting scalable solutions that provide music consumers with what they want: the ability to play their music on any portable device," said Michael Spiegelman, senior director of music, Yahoo! "This partnership accomplishes just that by putting Rhapsody's MP3 store in front of Yahoo! Music's 20 million monthly users."

Rhapsody and iLike, the leading social music discovery service, have created a new model that will monetize music consumption on the top social networks for labels and artists. To give iLike's enormous audience a taste of the popular Rhapsody Unlimited subscription service, Rhapsody will power free, full-song playback across iLike.com and iLike's leading music applications on the Web's most popular social platforms, including: Facebook?, MySpace, hi5, Orkut, and Bebo. Full-song streaming will be available for free to iLike users until a monthly threshold of 25 plays is reached, at which time iLike users can choose to sign up for a Rhapsody account or enjoy 30 second song samples until the end of the month.

Artists and labels will be paid royalties each time their music is played via Rhapsody's existing agreements. This will be the first widespread implementation of a scalable model to monetize the enormous potential for music consumption across social networks. iLike's more than 28 million registered users will enjoy free full-length song playback. Additionally, Rhapsody's MP3 store will also be added as an option to the iLike "buy" button.

"With this announcement, iLike is expanding from being the leading social music discovery service to becoming a powerful social music consumption solution," said Ali Partovi CEO of iLike. "In collaboration with Rhapsody, we're empowering artists and labels to make money every time their music is played on iLike and across the Web's major social networks."

Music Wherever You Are
Rhapsody and Verizon Wireless today announced the availability of their much anticipated joint service, V CAST Music with Rhapsody, that gives customers the benefits of unlimited access to music on a growing number of V CAST enabled mobile handsets that support subscriptions.

Verizon Wireless customers ? subscribers to the unlimited V CAST Music with Rhapsody service or not ? can purchase music directly from their phones and have the songs delivered over the air to their handsets. Unlike any other mobile music service, any tracks purchased over the air will be also downloaded ? in DRM-free MP3 format ? to the customer's PC.

"The Verizon Wireless partnership with Rhapsody brings an incredible cutting-edge service to American music fans," said John Harrobin, senior vice president of digital media and marketing for Verizon. "Whether you want your music over-the-air directly to your handset, direct to your PC and side-load DRM-Free MP3s to your phone, or access unlimited songs for about the price of a CD through our new subscription service, the clear choice is V CAST Music with Rhapsody."

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