Real Networks' Rhapsody music service, which had only been a subscription service so far, is joining into the every expanding fray of music services selling DRM-free MP3 files. Real has signed deals with Universal, Sony BMG, Warner, and EMI to sell songs at $.99 cents a song and $9.99 per album.
By embracing DRM-free MP3s as its format of choice, Rhapsody is driving yet another nail in the coffin of DRM'd music.
Rhapsody is also partnering with Verizon's mobile VCAST,and Yahoo, as well as MTV, VH1, CMT, and iLike.com.
While Rhapsody's subscription service will remain DRM'd for the foreseeable future, opening up an MP3 based store makes sense for Real if it wants to expand its market to owners of Apple's popular iPod, which is incompatible with Real's DRM scheme for its subscription service. Also, selling single MP3s has turned out to be a very popular way for many users to buy their music, while subscription based services always lagged behind in popular appeal.
Rhapsody will face competition from a host of similar services, most prominently Apple's iTunes, and Amazon's MP3 store. While Apple is still the dominant player in the market, Amazon's offering has found a loyal following lately by offering a slightly cheaper product at an often higher quality than Apple's DRM-free iTunes Plus. Walmart and Napster also just started offering DRM-free music earlier this year, but haven't really made a ditch into Amazon's or Apple's market share yet.
Given that most online music stores sell more or less the same songs (with maybe the exception of eMusic), price and convenience are pretty much the only ways for them to differentiate themselves from the competition. Rhapsody is hoping to set itself apart by offering users the ability to listen to 25 full-length previews a month instead of the standard 30 second clips other services offer. If this will be enough for users to start embracing yet another music service remains to be seen.
There is nothing particularly revolutionary about Rhapsody's offering, but, if anything, the fact that they are offering DRM-free MP3s now is a good sign for where the music market is heading. And with having both Verizon's and MTV's marketing behind it, Rhapsody might very well succeed where others have failed so far.