Real embraces Apple's iPod with new Rhapsody MP3 service

[AppleInsider]

RealNetworks said Monday it's switching gears in its quest for a larger slice of the legal music download market with the launch a DRM-free a la carte MP3 store that will cater to iPod owners directly rather than through unauthorized hacks of the past.

The move represents an about-face for the Seattle-based firm, which has long built its online music business around subscription-based services that offer subscribers temporary access to an unlimited number of copy-protected songs each month for a set fee.

Although Real had also previously offered a Rhapsody "To Go" service that sold tracks and albums outright, media files -- like those from its subscription services -- came wrapped in proprietary software that made them incompatible with Apple's industry leading iPod player.

Real said songs purchased from its new Rhapsody MP3 service can be played on virtually any MP3 player, including Apple's iPod and iPhone. Like iTunes customers, shoppers will be able to sample 30-second segments of each track before making their purchase, and all purchased tracks will immediately be funneled into either Rhapsody, RealPlayer or iTunes.

The service presently serves up 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. Most tracks are sold inline with Apple's pricing at $0.99 a song or $9.99 per album.

By contrast, Apple has thus far managed to secure only the music catalog of EMI in unrestricted AAC format for sale on iTunes. Threatened by overwhelming success of the iTunes service, the remaining labels have refused to come to terms with the iPod maker on sales of unrestricted tracks out of fear that such concessions would only increase the company's stronghold on the market.

In particular, labels have complained about Apple's unwillingness to allow flexible pricing on iTunes, as well as its unwavering approach to album sales, which mandates that customers be able to purchase individual songs from each and every album on the service rather than be forced into full album sales for particular works.

As part of its deal with the labels for Rhapsody MP3, Real has agreed to place throughout its store "a strong emphasis on the digital album with merchandising centers for 'new album releases,' 'old favorites,' and 'who's on tour.'" However, like similar deals between the labels and Amazon, Real is able to offer prices for its MP3 service that are on par with iTunes -- a move the labels hope will reduce Apple's influence on digital music sales.

Real, which commands just 1 percent of the online music download market, once attempted to boost adoption of its Rhapsody service by reverse engineering a hack called Harmony that allowed songs purchased from the service to be converted to Apple's proprietary FairPlay format for use on iPods.

Apple, which said in a statement that it was "stunned" by Real's adoption of hacker tactics to "break into the iPod," later issued a firmware update for its digital media players that dismantled the hack.

As part of its announcements Monday, Real said it will leverage the marketing power of Rhapsody's relationship with MTV Networks to launch a "Music Without Limits" ad campaign to support its new MP3 service that will include broadcast, online and print advertising. *

The company said it anticipates spending more than $50 million in the next year, including more than $15 million in the third quarter alone. As part of the campaign, it is giving away a free album to the first 100,000 people (US only) who sign up for the new MP3 store by July 4th.

[ View this article at AppleInsider.com ]

[columbus]

Is this US only?

[dariusperkins]

Originally Posted by AppleInsider

...it is giving away a free album to the first 100,000 people who sign up...

The first 100,000 US citizens to be precise.

[lfmorrison]

Originally Posted by dariusperkins

The first 100,000 US citizens to be precise.

To be even more precise, the first 100,000 persons legally residing in the US. Citizenship is not a legal requirement of residency.

[Chris_CA]

Originally Posted by AppleInsider

"By contrast, Apple has thus far managed to secure only the music catalog of EMI in unrestricted MP3 format for sale on iTunes."

[ View this article at AppleInsider.com ]

Apple doesn't sell MP3 format songs.

And the article the text links to does not mention MP3 at all.

[SpamSandwich]

And what 'resolution' of MP3 is Real offering? Same as Apple or same as Amazon?

[jds17j]

Originally Posted by lfmorrison

To be even more precise, the first 100,000 persons legally residing in the US. Citizenship is not a legal requirement of residency.

um, i'm pretty sure an illegal alien or a visitor could in fact sign up and receive a free album as long as they are accessing the internet from the United States. I'm sure the same applies to anyone who resides on the border of Canada or Mexico who is either close enough to receive a wi-fi signal from the US or has a US based cellular plan with data and tethering and get a signal from the US at their border location. all they would need is a rechargeable credit/debit card from the US to sign up. If rhapsody even cares/checks that...

[Louzer]

Originally Posted by SpamSandwich

And what 'resolution' of MP3 is Real offering? Same as Apple or same as Amazon?

256 kbps, so I think that's the same as amazon.

[SpamSandwich]

Originally Posted by Louzer

256 kbps, so I think that's the same as amazon.

Yep, found it here.

[bpatton]

Umm, as an avid iTunes Store shopper, what incentive is there for me to even peruse Rhapsody? From what I can tell in the article, it still isn't subscription based for this MP3 service, and is basically an iTunes Store clone.

Unless I read that article completely wrong and it is a subscription service that works directly with iTunes software, which in that case could someone point that out to me?

[probably]

Originally Posted by bpatton

Umm, as an avid iTunes Store shopper, what incentive is there for me to even peruse Rhapsody? From what I can tell in the article, it still isn't subscription based for this MP3 service, and is basically an iTunes Store clone.

Unless I read that article completely wrong and it is a subscription service that works directly with iTunes software, which in that case could someone point that out to me?

You get access to more labels doing no-DRM content at the same price. And also MP3 instead of AAC.

[cklapka]

Originally Posted by bpatton

Umm, as an avid iTunes Store shopper, what incentive is there for me to even peruse Rhapsody? From what I can tell in the article, it still isn't subscription based for this MP3 service, and is basically an iTunes Store clone.

Unless I read that article completely wrong and it is a subscription service that works directly with iTunes software, which in that case could someone point that out to me?

There are songs and albums that are not in the iTunes music store so, if one is looking for a digital copy then this is an alternative source for your library. I was able to find an album not on iTunes or Amazon. The iTunes experience is still much better of course.

[nate.hanson@mac.com]

Those outside the US aren't missing much. I live in the US and decided to set up an account and claim a free album. Turns out their MP3 store is still very much a beta. It allowed me to add an album to the cart, check out using my $10 credit. Then the download failed before I got any of the tracks down. Their site doesn't allow for re-downloads and their first level of support could do nothing to reset the download count and let me try again. They told me tier 2 support would be in touch in 24 hours. But basically I'm out of luck and the free credit is history. Good thing I didn't spend any real money!

To summarize. If you really want cheap (legit) MP3s try Amazon's MP3 store. If you want reliability and usability try iTunes. But if you're looking for a headache and a waste of a couple hours, by all means, check out Rhapsody MP3.

[zagot]

I hate it when people make unauthorized hacks of the past. It messes up the future!

[chuckbo]

Be careful about that free offer. I'm on their website, and they want me to give them my credit card so they can sign me up for their $12.95/month Superpass subscription service. To me, it looks like you can only get the $10 credit if you get the 12.95 account.

[chuckbo]

Originally Posted by chuckbo

Be careful about that free offer. I'm on their website, and they want me to give them my credit card so they can sign me up for their $12.95/month Superpass subscription service. To me, it looks like you can only get the $10 credit if you get the 12.95 account.

It might be okay. I followed a link directly from the home page this time, and it still asks me for a credit card, but it doesn't say anything about using it to bill me for a superpass. But I'm going to be very careful and contact them in a couple of days to make sure that they aren't billing me monthly.

[Mr.Scott]

I know there will be many an answer, and that's cool by me, but wouldn't a higher bit MP3 (256 kbps) be of better sound quality that an ACC 128 kpbs track from Apple? I know that ACC is "supposed" the be better but isn't bit rate really what matters?

[TBell]

So, I drop the superior AAC format for MP3? In addition, I help the labels de-seat Apple so they can later rape me? No thanks.

Originally Posted by probably

You get access to more labels doing no-DRM content at the same price. And also MP3 instead of AAC.

[caliminius]

Originally Posted by TBell

So, I drop the superior AAC format for MP3?

Well, if you're purchasing all of your music from the iTunes Store you clearly downgrading from the superior CD format, so what's the difference? Rhapsody's mp3's will sound better than iTunes 128k DRM'ed tracks even using an "inferior" format.

In addition, I help the labels de-seat Apple so they can later rape me? No thanks.

Or you can just stick with Apple and be "raped" today instead of later. Apple's album prices are some of the most expensive around, even compared to brick and mortar stores.

The labels don't have the power to "rape" you, even if the iTunes Store dies tomorrow. The 99 cent price has been pretty much locked in and none of the competition has the ability to go above it.

[Kenneth]

Seems like a good move for RealNetworks. In terms of non-iTunes music marketplace, I tried Amazon before. It's pretty straight forward, but I end up going back to the iTunes store. I have iTunes opens all the time and it's still easier for me to obtain music without fire up a web browser.

I trust Apple and Amazon, but really not sure about RealNetworks.