Rhapsody hacks down its own pricing model

by Stevie Smith - Apr 7 2010, 13:05

Rhapsody International Inc., freshly spun off as its own free-standing business by parents RealNetworks and MTV Networks, has this week made an aggressive move in the digital music marketplace by reducing its monthly subscription rate from $14.99 USD to a more pocket-tempting $9.99 USD.

AP reports that Rhapsody is hoping the price drop will attract iPhone users who've sampled the smartphone handset's Rhapsody application and may now be keen to embrace the complete cloud-based streaming service and its all-you-can-listen-to structure.

Launched back in September of 2009, the Rhapsody mobile application was promptly snapped up by some 1.5 million handset users. However, despite providing access to around 9.5 million song tracks across a free seven-day trial, the $14.99 USD subscription fee failed to move the majority – something that may now change thanks to the revised price point.

“Separating Rhapsody into its own independent company is a significant first step in making RealNetworks a more focused and profitable company,” said Robert Kimball, president and acting CEO of RealNetworks, when the spin-off was announced back in February.

“Rhapsody will be the largest pure play digital music service in the market,” he added. “We have provided Rhapsody with the right team, and financial and intellectual property assets to succeed in the competitive market for digital music.”

While the lowered subscription model is likely to have a positive effect in terms of drawing mobile phone users in, it does come with one notable caveat. Specifically, the new $9.99 USD plan restricts service access to a single device, whereas the old $14.99 USD model allowed users to enjoy streamed content on multiple devices.

In related news, Rhapsody is also looking to extend its reach in the mobile space by unveiling a streaming application created specifically for handsets equipped with Google's increasingly popular Android operating software.

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