RealTime IT News

Rhapsody Slashes Download/Burn Price

RealNetworks on Wednesday raised the stakes in the digital music wars, announcing a major price cut for CD-burning on the Listen.com Rhapsody service.

One month after its $36 million acquisition of Listen.com, RealNetworks announced the launch of the co-branded RealOne Rhapsody fee-based service with song burns at 79 cents per track, 20 cents cheaper than competitors.

RealOne Rhapsody, which is being marketed to Real's one million SuperPass subscribers via a one-click subscription option, will offer custom radio stations for $4.95 per month alongside a $9.95 monthly plan that allows unlimited streams and access to burn songs for 79 cents.

The 79 cents-per-song burn is only available to paying subscribers of the monthly service, according to Real's VP of media systems Dan Sheeran. The price cut follows a 49 cents download-and-burn test promotion run by Listen.com that showed a 300 percent spike in song purchases.

Real's aggressive price cut comes on the heels of Apple's launch of a 99 cents per song download and burn iTunes service that hit the ground running with one million downloads in the first week.

Despite the fact that copyright licensing terms call for a huge chunk of revenues to be shuttled back to the record labels, Sheeran told internetnews.com the 79 cents per download price point could bump up revenues because it is only available for subscribers who were already shelling out $9.95 a month to access the service.

"Because of the economics of streaming, we can operate the service at a profit with 79-cent burns because we will be selling increased subscriptions. The people who subscribe to the Rhapsody service, on average, listen to 250 unique songs per month," he explained.

Apple's iTunes, by comparison, does not require a monthly subscription for its 99-cent burns but that service is only available for Mac users.

Sheeran confirmed RealNetworks had increased its investment in the competing MusicNet service, pushing its ownership stake up to about 40 percent. "We continue to be the technical backend for MusicNet and we very much intend to be a partner in that service," he said. "In terms of what we will retail to our userbase, we plan to keep that simple by going with Rhapsody."

Separately, Listen.com announced that its distribution partners would also be selling download and burns at the 79 centws price point. Those include CableVision, Audiogalaxy, Charter Communications, Gateway, JamBase.com, RCN Corporation, Speakeasy and Verizon Online.