Update: Rhapsody DRM-Free Music Targets iTunes

By PCMag Staff

June 30, 2008

Online music store Rhapsody is going up against iTunes with the Monday launch of a $50 million initiative that will provide DRM-free downloads, and the availability of Rhapsody content on Verizon V Cast phones and Web sites like Yahoo Music, MTV.com, and iLike.

Rhapsody, owned by RealNetworks, launched the offering, dubbed Music Without Limits, in conjunction with MTV Networks in an effort to "turbocharge the digital music industry," according to Real.

Rhapsody's digital music store will offer DRM-free MP3 tracks that can be played back on any number of digital players -- a list that, for the first time includes Apple's iPod.

The selection from the newly re-revved store includes some 5 million tracks, featuring music from a number of high-profile labels like Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI, as well as a large selection of indies.

The majority of albums will be available for $9.99 a piece or $0.99 per track.

As an added bonus, users will be able to stream full-length tracks for free, up from the standard, 30-second cutoff imposed by most sites.

"This brings to reality our long-held vision to extend Rhapsody even further beyond the PC," Real's chairman and CEO Rob Glaser said during a conference call with reporters.

Real will also add Rhapsody to V Cast-enabled Verizon handsets. V Cast users, regardless of whether they are Rhapsody subscribers, can purchase music from Rhapsody's music store with their handsets. The DRM-free music can then be downloaded to the user's PC.

"Real has an open platform, broad distribution, a DRM-free MP3 focus, and Real also brings the power of MTV's marketing engine," said John Harrobin, senior vice president of digital media and marketing for Verizon.

Verizon customers will have three options to access Rhapsody content: an unlimited Rhapsody account for $14.99 a month; purchasing songs from their V Cast phones; or uploading existing music libraries onto Verizon phones.

V Cast users can buy songs with their phones over-the-air for $1.99 and for 99 cents from the PC, Harrobin said.

When customers purchases songs over-the-air, they get two copies of that song, Harrobin said. "One copy is sent to the mobile phone and the second copy is sent to the PC. That second copy is a DRM-free MP3 file."

Of the approximately 20 V Cast phones from Verizon, nine of them have been retro-fitted to sync with this new Rhapsody service, Harrobin said, including the LC Decoy, the LG Dare, the Samsung Glide, and the Samsung Juke.

Those devices, however, will provide a "good but not optimal experience" with the Rhapsody offering, Harrobin said. Verizon will release the LG Chocolate 3 phone by the end of July, and that has been "tailor made for V Cast with Rhapsody," he said.

The main benefit of using the Chocolate 3 instead of existing devices is the transfer speed, according to Harrobin. The Chocolate 3 will also include a music button on the side that will provide one-touch access to the Rhapsody service, he said.

All future V Cast phones will also "follow that same Chocolate 3 pattern," Harrobin said.

Memory cards with up to 8GB of memory, or about 2,000 songs, are currently available, and Verizon plans to have a 16GB card for sale by year's end, he said.

Those who opt for the $14.99 per month Rhapsody subscription, meanwhile, can authorize up to three PCs and three mobile phones or MP3 players.

In the coming weeks, Real will also be integrating Rhapsody with a number of external sites like Yahoo Music, MTV.com, CMT.com, and VH1.com, giving users free streaming and purchasing capabilities outside of its own store.

"With the Rhapsody MP3 Store, we're giving our audience the means to load up on all the music they love while they're on our sites - yet another way in which we're weaving Rhapsody into the fabric of all of our programming across all of our screens," said Courtney Holt, MTV's executive vice president of digital music and media.

MTV Networks last year dropped its Urge digital music offering to partner with Rhapsody for a venture backed exclusively by Verizon Wireless.

A partnership with iLike will give users similar functionality across various social networks. iLike, meanwhile, will add Rhapsody as a purchasing option for tracks bought through its network.

Real capped off its slew of announcements this morning by offering a free digital album of their choosing to the first 100,000 people who sign up with their new music store by July 4. The offer can be accessed through Rhapsody's promotional site.

Rhapsody said it "anticipates using media worth more than $50 million in the next year and worth more than $15 million in the third quarter alone."

This post originally appeared on AppScout.

Editor's Note: This story was updated at 2pm EST with additional details from the Verizon/Real conference call.