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.