iLike Rhapsody - why don’t more people?

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Today, Rhapsody (a joint venture between RealNetworks and Viacom’s MTV Networks) launches another initiative aimed at selling its subscription music service. My colleague Michelle Quinn has the details here, such as Rhapsody’s answer to the new Napster MP3 store, but I wanted to drill down on a couple of elements from the announcement.

To me, the MP3 store is the least interesting feature. Yes, it has more DRM-free tracks than the iTunes store, but so does Napster’s. More intriguing are the partnerships aimed at introducing more people to Rhapsody’s vast celestial jukebox, the core feature of its subscription service. These deals, especially the one with iLike, may mark the first time Rhapsody or any other subscription-music service has been effectively marketed. (When it comes to selling digital music products and services, Apple has been in a league of its own.) Sometime in July, iLike’s 28 million users will be able to play for free just about any song mentioned on its network of sites, not just 30-second samples or the handful of full-length tracks posted by selected artists. The same capability will be rolled out gradually through Yahoo and MTV Networks’ online properties, such as CMT.com and VH1.com.

There is, however, a non-trivial caveat.

The free music is limited to 25 tracks per month. To escape the meter, you have to sign up for Rhapsody’s unlimited service, which costs $13 to $15 a month (the former works on any Internet-connected computer, the latter extends to Rhapsody-compatible portable devices). But unlike MOG, iLike won’t give Rhapsody subscribers free rein to play anything and everything on its network, at least not initially. According to iLike CEO Ali Partovi, the first objective is to improve the iLike experience by letting users listen to more full-length songs for free.

So while the combination will certainly make iLike more appealing, I’m not sure how much it will help Rhapsody. That’s because the sample that people will get won’t convey its essence, which is the joy of playing music without limits -- the chance to indulge every impulse, to satisfy every curiosity. It’s the ability to listen to any track, artist or genre without fear of wasting your money. This is the real value of subscription services in general, and it’s been a tough sell because it’s intangible.

How tough? Rhapsody doesn’t reveal its audience size, but RealNetworks reports a cumulative total for subscribers to Rhapsody and its premium radio service. That total in the first quarter of 2008 (the most recent financial disclosure) was unchanged from a year ago, and down a bit from the last two quarters of 2007. With that kind of trajectory, can there be much doubt as to why such leading brands as Yahoo and MTV gave up on their own subscription services? Clearly, Rhapsody hasn’t found an effective way yet of answering Steve Jobs’ criticism that ‘people want to own their music.’ (Here are a couple nice arguments pro and con Jobs’ position.) Unless it can escape the comparison to buying songs and be judged simply as an entertainment service, it’ll have a hard time gaining traction.

Rhapsody also announced that Verizon Wireless will offer phones that work with the portable version of the music service, with the price and availability still to be determined. Alas, the plan is to equip the phones with the same flaky Microsoft DRM (the misnamed ‘PlaysForSure,’ now redubbed ‘Certified for Windows Vista’ -- oh so relevant to the Windows XP loyalists) that has made Rhapsody To Go unreliable on some devices. It would be so much more inviting to enable people to access Rhapsody wirelessly, wherever they happen to be, through Verizon’s network. But streaming music would also eat bandwidth, so the carrier wasn’t enamored with the idea of turning its phones into radios tuned to Rhapsody’s jukebox. For that experience, you’ll have to stick with a WiFi-equipped player like Haier’s Ibiza Rhapsody.

The gleaming blue device pictured above is an Ibiza Rhapsody 8 GB, and the image is courtesy of Haier’s website.