April 06, 2010

By By Antony Bruno, Denver

Rhapsody has completed its spinoff from RealNetworks, and is celebrating by unveiling an Android version of its mobile app and lowering the monthly subscription fee required for mobile access.

According to the company, the new Rhapsody will focus very heavily in its strategy going forward. With that comes Rhapsody Premier, a new subscription offer that allows users to stream music from any browser, supporting cable TV box or home entertainment system, and mobile phone for $10 a month. Previously, mobile access cost an additional $15 a month.

That puts Rhapsody in line with other mobile streaming offers from such services as MOG, only it's not offering a cheaper non-mobile offer for $5 like those others do. According to a Rhapsody spokesman, the lower monthly cost is the result of renegotiating licenses with labels, who not only get the majority of the monthly per-subscriber fee but have demanded higher fees for portable service over concern that mobile on-demand streaming may cannibalize download sales.

It's one reason why Napster still hasn't launched its iPhone app despite saying they have one, and why Rhapsody and analysts have said the $15 monthly fee results in attracting only the most niche music enthusiasts as subscribers.

However the Rhapsody spokesman says labels have found renewed enthusiasm for the subscription model and have shown more flexibility in their licensing deals.

Rhapsody will support the Premier offer with a national TV ad campaign, in part supported by MTV which as part of the spinoff is contributing $33 million in advertising commitments.

The spinoff ultimately took almost a year to complete, and is seven years after RealNetworks first acquired Rhapsody and Listen.com in April of 2003. The company will remain headquartered in Seattle with 150 employees, and will be led by John Irwin as president, formerly COO of the joint venture.

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