Wednesday, February 10, 2010

RealNetworks' Rhapsody in Blue

RealNetworks and MTV -- joint owners of the online music subscription service Rhapsody -- have had enough. They will spin off Rhapsody into an independent company, controlled by neither (Real previously owned 51% of the service).

Despite being a great service -- and great bargain (unlimited on-demand tracks for less than $15 per month) -- Rhapsody has never taken off in the way expected. I seem to be one of the few long-time customers, as the service continues to shed customers (the service most recently announced 700,000 subs, down 100,000 from several months earlier).

I continue to believe in the subscription music model -- as an example, there is much talk that Apple's iTunes will launch a new subscription service later this year -- but, Real and MTV apparently find it to be a distraction. Despite the tremendous opportunity they had to lead the way in the online music world, the companies dropped the ball and never fully harnessed the tremendous promotional power of MTV (just think of the mind-share they had!).

Call Real's departure from its long-time service its "Rhapsody in Blue." Or, is it signing off from its pioneering singing "Bohemian Rhapsody"?