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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

November 29, 2011 at 3:10 PM

Rhapsody melds with Napster Thursday, free concert next

Seattle streaming music pioneer Rhapsody has a few milestones to celebrate this month.

On Thursday it’s completing its merger with Napster, and shifting Napster subscribers over to the Rhapsody streaming music service.

Then on Saturday, Rhapsody celebrates its 10-year anniversary. On Dec. 3, 2001, the company, then based in San Francisco, launched its service providing subscribers unlimited access to a huge online music catalog.

Rhapsody moved to Seattle after it was acquired by RealNetworks in 2003, which then spun Rhapsody off as a separate company in April 2010. Rhapsody now has 170 employees, including 120 at its headquarters in Seattle; The rest are in San Francisco and New York.

The company is celebrating its anniversary with a concert at the Seattle Showbox next week — featuring Built to Spill and other acts — for employees, industry partners and others. The company’s also offering a limited number of free tickets to the public (21 and over) here.

Rhapsody can’t party too much, though. A resurgence of interest in online music services has brought new competition from newer players like MOG and Spotify and tech giants like Amazon.com, Google and Apple.

But Rhapsody President Jon Irwin said the company is thriving, having ridden through the advent of the iPod, smartphones and wireless networks capable of quality music streaming.

“Not ony were we first but by virtue of that, we’ve been around the longest. We’re in probably a stronger and healthier state than anytime in our history, and we’re still leading the market in terms of introducing change,” he said.

Irwin wouldn’t provide an update on subscriber numbers, beyond the 800,000 that Rhapsody disclosed this summer, but said, “I’m pleased with where we are.” A partnership with MetroPCS that makes Rhapsody available to its Android phone users is adding subscribers, as will the Napster merger, which was first announced in October.

Meanwhile, Spotify announced last week that it reached 2.5 million paying subscribers, up from about 2 million when the European company launched its U.S. service this summer, offering limited free service and upgrades to paid subscriptions.

Irwin didn’t comment directly on Spotify’s growth but said Rhapsody’s business is more sustainable. “We’re not going out and relying on huge chunks of venture capital to fund free models,” he said.

Looking ahead, Irwin expects the number of music tracks streamed to grow from hundreds of millions to billions and trillions.

But will Rhapsody still be independent, or part of a larger company, 10 years from now?

“Anything’s possible,” Irwin said. “If we continue to innovate and develop a great product, potentially that changes. What I want to do is continue to operate the business the way we’ve been operating it.”

Comments | Topics: Digital media, RealNetworks, Rhapsody

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