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Rhapsody: Blues or Bohemian?

If your idea of fun is going up against the dominant music download company in iTunes, then Verizon Wireless, MTV and Real Networks ought to be in for a humdinger of a good time. That is the gist of their joint announcement this week. (See full story below) Called Rhapsody America, the Tier 1 operator is joining forces with RealNetworks and MTV to provide a music service that will be accessible through mobile devices, PCs and portable music devices.

In a classic David and Goliath effort, the three seem to be saying the sum of their parts will be much greater than if they pursue their own strategies individually. Take MTV's URGE service, which failed to garner any real enthusiasm, combine it with RealNetwork's Rhapsody and then dish it up on Verizon Wireless' network and, viola, you have Rhapsody America.

The obvious challenge will be competing with a music service that is deeply entrenched with the consuming public. (OK, maybe the music service isn't entrenched, but surely the Apple iPod is.) But another challenge looms large for the powerhouses. As Ovum's Senior Analyst Jonathan Arber points out, the service will not be playable on iPods. That could affect uptake dramatically.

But on the plus side, the deal will allow the three companies in the joint venture to compete more effectively against both Apple's iPhone and iTunes. Plus it expands the music space marketplace.So consumers now have choice. And let's not forget that each of the three of these companies is a force to be reckoned with in their own rights. So it could get interesting.

Adding to the interest in the space, Wal-Mart is taking a swipe at iTunes as well. The retailer announced it would sell its DRM-free songs for 94 cents per track, which undercuts iTunes' $1.29 charge for DRM-free songs and 99 cents for regular, copy-restricted tracks.

Will any of these efforts have any impact on Apple and iTunes?
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Source:  August 24, 2007, Rhapsody: Blues or Bohemian?,
By Rhonda Wickham
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