Rhapsody Hooks Up With MTV

The big news this morning (for me anyway) is that Rhapsody is hooking up with MTV. Real and Viacom are forming a joint venture to promote and market the Rhapsody music service. Regular readers know what a huge fan I am of Rhapsody so I figure you all want to know what I think about this move.

First, I am happy to see a company like Viacom with significant resources so excited about Rhapsody. Rhapsody has been around a long time, has lost money as far as I know since inception, and is still very much a niche service. So the fact that MTV is excited about Rhapsody is a good thing. I hope and expect that they will be investing cash and/or marketing dollars into Rhapsody as part of this joint venture.

I think Rhapsody (or a service like it) is the future of music. It won’t be long until we can connect to the Internet from anywhere and when we can, there will no longer be a need to have files stored locally on any device (ipod, computer, laptop, music server, etc). We’ll just log into whatever music service we use, decide what we want to listen to, and the music will start playing. That’s how it works in my home already.

But not many people seem to understand Rhapsody. The two negatives I always hear are:

1) people want to own their music (even though they don’t want to pay for it)
2) $9.99 per month is too high. people are tired of monthly fees and don’t want another one

I think marketing, real marketing, not the Microsoft style marketing that Real executes, will help with both issues. But the marketing cannot only be about awareness, it also needs to be about the value proposition. All the music, all the time, with the click of a button.

But marketing alone won’t cure what’s wrong with Rhapsody. Here are the things I’d do if I were Real’s new partner MTV.

1) Offer a subscription plan that incorporates an eMusic style DRM free music download service. For those people who do want to continue to own music, Rhapsody should offer "sample and own’ plan. For say, $20/month, you get unlimited listening plus 30 downloads a month. And Rhapsody will know what you are listening to and can recommend what those 30 downloads should be.

2) Get on more connected devices. Sonos with Rhapsody is the killer product. It takes Rhapsody off the computer and into the living room and gives you a wireless controller so you can change the music without getting up. But there are many connected devices out there and more coming every day. Get Rhapsody on all of them. Make deals with the devices manufacturers to incent them to bundle with Rhapsody. I’d give a year free as an incentive to bundle. Once you’ve had Rhapsody for free for a year, you won’t be able to live without it.

3) Go mobile with a streaming service. I don’t want a cheap Sansa device that is basically an inferior iPod. I don’t want to have to synch a mobile device with Rhapsody to get my files on my mobile device. That’s copying the iPod/iTunes experience with an inferior offering. Blow right past iTunes. Offer me the ability to stream to my mobile device like I do with my laptop and Sonos. I am listening to Rhapsody right now in the back of a car taking me to JFK. We are going 60 mph down the Southern State Parkway and the reception is excellent. Why can’t I have a mobile device like an iPod that does that? That uses the iPod connectors so I can make it work in my car? Or better yet, just give it to me on my phone.

4) Build a social network around Rhapsody. Buy Yottamusic and incorporate all of its features into Rhapsody.com. Build an API that lets any connected device that is running Rhapsody (Sonos, Squeezebox, Phone, Mobile Music Player, etc) report back to Rhapsody what I am listening to and share that with my social network on Rhapsody.

None of these are rocket science. Others have paved the way for all of these moves. There’s nothing new here. Just good product management and common sense. My hope is Real’s new partner, MTV, will force the management of the joint venture to do all of these things and do them asap.

Because Rhapsody is an awesome service. Music dial tone. It would be a shame if the company that invented the future of music didn’t profit from it.

#My Music#VC & Technology

Comments (Archived):

  1. howardlindzon

    or just have an ipod and listen to the 40 songs that most people need.

    1. fred Wilson

      if that’s true that most people only listen to 40 songs then i feel sorry for most people

  2. howardlindzon

    what you dream about is much like the az. cardinal fans must go through on their way to a cradinals football game every sunday for 40 years. I feel for you I guess.go enter your price pick for crox at wallstrip. Much better chance of being right 🙂

    1. fredwilson

      i’ll take that bet howard. i bet that Rhapsody or a service like it will overtake iTunes in the next five years as the preferred way of listening to music.and i bet that Crocs will be like Air Jordans. nobody will be wearing them in five years.

  3. bsiscovick

    Amen. Rhapsody is a great service, but I think we are close to it making it even better…It almost boggles my mind that no one has figured out how to take the power and simplicity of rhapsody and bring it to the mass market. Other than the obvious marketing issue (which under the right conditions wouldn’t even require a partner like MTV, it would all happen virally through the Net) the reasons it hasn’t caught fire are simple: a) it’s not given away for free, b) people don’t own it, and c) it is too cumbersome to make this service portable.Well all of this will change, no doubt. First, someone is going to figure out how to crack the free, on-demand ad-supported model. It needs to be simple and painless for the user, and this clearly hasn’t happened yet (even though we keep hearing about SprialFrog and other services). Second, it soon won’t matter if we “own” the music nor will it be too cumbersome to make this service portable – simply because everywhere will be wired into the Net and our access will be unencumbered and consistent. Why would I even want to use up personal memory when all of the music I could ever want is always at my fingertips, anywhere I want it, on-demand?I’ve spent lots of time thinking about this issue, but I really think many of the current attempts at making this work are a little ahead of its time. Once the whole world is wired (or at least just the U.S., Asia or Europe for starters) these models may very well flourish and change the way we listen to and interact with our music “collections.”

  4. J Herskowitz

    From: http://globallistic.blogspo…A couple of more moves are needed until Real has got a realistic shot a making a dent in Apple’s marketshare. 1. First, the market needs Napster (or at least their customers) to be acquired by Rhapsody too. Then, the market confusion will start to clear a little (iTunes needs one strong competitor, not a bunch of tiny ones) – then they can easily position A vs. B in their marketing messaging. 2. Offer DRM-free a la carte tracks (which they are going to do) – word is that they will be really high bit-rate (upwards of 256kbps) MP3s. Sell them for $1 each. 3. Introduce an ad-supported streaming service – with an upsell tier to ad-free listening. 4. Partner with every “music 2.0” site out there and syndicate their free play web player – support *lots* of external communities, not just their own – cut affiliate relationships with them all.Now they have a basic value proposition that the market can understand – “we are just like iTunes but instead of 30-second samples you can listen to the whole song”. Songs you buy can be imported into iTunes and sync’d with an iPhone (iPod sync is supported by other players, but if you want to sync your contacts/calendar with your iPhone then currently can only do that with iTunes). You also have a great web-based streaming experience that doesn’t require a fat media player client.Over time they could move towards “package” download tiers (like eMusic where you can download x tracks/month). I would personally like that model, but I actually think they should refrain from offering that as it confuses the marketing message. Once people understand it is “just like iTunes only better”, then they can move on and try some new models.All that being said… there is nothing keeping Apple from doing all this themselves if/when the Rhapsody plan started getting some traction.

  5. nick

    With CBS owning Last.fm, why not do the world a favor and link those services?Also, as I was listening to music on the speaker of my Pearl last night, which holds 2 gigs, I thought “How in the world can record labels find this threatening? I can have all my music with me all the time. I am a better, more engaged fan. I listen to so much more music. And they see this as a BAD thing?”

  6. Mark Mezrich

    I think another challenge is that there is an initial investment of some money, a download, and a login. It’s not easy to really sample the power of this program. The free trials help (I was hooked thanks to a 14 day trial) but there needs to be a more creative solution than that. They have to find a way to remove the barriers for consumers to at least experiment with it.

  7. Andrew

    How about making the service available in more than one of the many countries in the world?

  8. Mike D

    I really hope that #4 happens. The user experience and social networking features on YottaMusic are first rate and I’d really like to see it get incorporated into Rhapsody.com.

  9. jackson

    What are those 40 songs Howard?40 songs! As if!Well, my contempt for digital media is well documented……..

    1. fredwilson

      yes they are.and we’ve expect it of you Jackson.i am happy to see your contrary views even though you don’t like this comment system – yet

  10. Marc Cohen

    This move is being presented in the press as a union to compete against iTunes. Why would anyone want to do that? iTunes sells a relatively small amount of music – especially compared to the installed base of iPods. A $20/month service from Rhapsody America, as Fred suggests, would make them a niche player since the core music listening audience – young, cash strapped people – couldn’t afford this and if they could, wouldn’t pay for it.At this point in the new world of music, the only way to make a dent is to make music cheaper, or free. Real ad-supported downloaded music (not Spiralfrog or even WE7 style ad-supported music) can do this. The option of ad-supported music lowers the total cost of music consumption since some portion of a person’s library can be paid and some ad-supported.Ad-support built TV, radio and the Internet, why wouldn’t it work for downloaded music?Check out the Ad-Supported Music Central blog:http://ad-supported-music.b

  11. Jeff R

    Fred,What do you think about Slacker (www.slacker.com) v. Rhapsody?Jeff

  12. Bruce Warila

    I have thumped on subscriptions services for a year… I did not want to copy my entire post. Here’s a snippet..The value of the time it takes to find a new song that you like is actually more valuable to most consumers than the retail cost of the track. This explains why a far greater percentage of the population prefers to own the music they consume. The retail cost of loosing your music is one thing, but the time value of loosing the collection you amassed during so many music safaris is priceless.It seems like the best solution to the collection-disappearance problem would be to offer a bookmarking service that enables any subscriber to easily move his song collection (amassed within a subscription service) to any other music platform in the marketplace. After all, nobody wants their song collection inescapably tied to one company. The music subscription service providers only have to look at how phone number portability in the telecom industry has helped ease consumer concerns, as well as to drive new service activations. It should be clear that a similar service for songs would benefit everyone.http://songboost.blogspot.c

  13. phoneranger

    Type your comment here.

  14. phoneranger

    Here’s the advantage iTunes has over Rhapsody et al: they don’t care. iTunes is a loss leader for their hardware business…as far as we know it may or may not be cash flow positive for AAPL. Rhapsody has to compete against a service that doesn’t need to make money. If they get traction you can bet AAPL will come back with pricing that knocks the socks off RA. I don’t see how RA is necessarily different from iTunes from the artist (and label) perspective. If RA works it only speeds up the demise of the CD which finances the industry (albeit not very efficiently). IMO what’s needed is a way for content producers to get paid for filling up the 30G hard drives on millions of iPods. That’s a different way of distributing music but the industry has done it before.

  15. Thomas Morling

    As usual, Fred, you are dead on. I couldn’t agree with your summary and recommendations more. I listen to Rhapsody every day. The monthly fee is a bargain compared to iTunes or buying CDs, and I don’t need to find storage for all those plastic disks.

  16. Jon Smirl

    DRM is stopping this vision from happening. In order to receive Rhapsody every device has to be modified to incorporate Real’s DRM code or WMA or iTunes DRM, etc, etc. These are tiny devices with tiny CPUs, not desktop PCs. It takes a lot of engineering effort to support multiple DRM systems. And what’s the payback for doing all of this engineering? The people selling the DRM music don’t share revenue with you; instead they charge the device manufacturers royalties for using their DRM systems. Much easier to make the device DRM free and let the owners fill them with free P2P music.For this vision to move broadly forward you need multiple DRM free streaming sources. Multiple sources allows the listening devices to be manufactured without locking them into a single music vendor. DRM free also allows new entrants into the music sourcing business. That last thing this industry needs is every piece of music locked with WMA and Microsoft changing $100 a device for a WMA license. Just look at Apple as an example of what controlling DRM can do.

  17. GT

    MTV has never executed well in the digitla media space – why do you think they can do it better now. MSFT unloaded their old crap on MTV at CES 2006 and then made MTV spend close to 40 million in advertsing the showcase in WMP. That was a sucker deal if I ever saw one. Now MTV unloads their crap into a JV with Real Networks. As you pointed out Real has yet to address the issues around great adoption – although I will cede that Real is one of the incumbents best positioned to make it happen – but their device strategy will always be be hostage to a third party.I suspect Real and MTV are now setting up another sucker in a long line of suckers to unload their JV. Could it be the third party in that happy go lucky picture – Verizon? I would also venture to say that Mr. Glaser is done with audio – he is moving on to Video — and clearly has a better chance to make a difference.What do think Fred?

  18. Dick Costolo

    as you and others have noted, when DRM is removed from the equation, the vision for music dial-tone for a monthly fee will become a reality, and the industry will make it’s *real* money from all the add-ons like they do in mobile. The music dial-tone equivalents of SMS, ring-tones, 411, etc will be huge. I have no idea what those are but it’s obvious that they exist. DRM is killing the music industry, and it’s shocking it’s taking the industry so long to realize it. People don’t want free music, they want convenience and they will pay for it. In fact, they’ll pay double for it.

  19. Gerd Leonhard

    Good stuff, Fred. I just posted some comments here: http://www.gerdleonhard.net…My comment: agreed but this is precisely why we won’t be able to distinguish between streaming and downloading any more. All-pervasive wireless broadband will kill the idea of ‘listening only’ versus getting a copy / paying for a digital download. Access will trump ownership. Therefore, the labels must monetize ACCESS first and foremost, and only THEN the copies. Remember the roots of Rhapsody are in online radio, and imho that is what needs to be offered first: ‘feels like free’ on-demand streaming, based on community and advertising support, and only then move into ownership propositions.

  20. Andrew

    It would help if embedding music from Rhapsody in a post wasn’t so cumbersome.

  21. kamasutras

    Images from the Kama Sutra.These texts support the view that in ancient India, sex was considered a mutual duty between a married couple, where husband and wife pleasured each other equally, but where sex was considered a private affair, at least by followers of the aforementioned Indian religions. It seems that polygamy was allowed during ancient times. In practice, this seems to have only been practiced by rulers, with common people maintaining a monogomous marriage. It is common in many cultures for a ruling class to practice polygamy as a way of perserving dynastic succession.Art from the Ajanta Caves of India.newfreevideo newfreevideo