Bohemian Rhapsody

The Apple iTunes store will go down in history as a textbook success story. Other music services, such as Rhapsody, might just go down as footnotes.  While iTunes has prospered, Rhapsody has struggled. The service offers over 5 million songs, but employs a subscription business model. Users essentially rent their music, paying a monthly fee of about $15 a month, and can play as much music as they want. However, if you don't ante up the monthly nut, you lose access to your tunes.

Unfortunately for Rhapsody, most consumers have opted for the iTunes model, where they buy their music a la carte. For 99 cents a tune, you download the song you want, and it's yours forever (within digital rights limits). Maybe it's a fear of commitment, maybe it's just one monthly fee too many, but forever reason, that's the way it's shaking out.

Yahoo Music, once considered a serious force, threw in the towel, sold its assets to Rhapsody, and will shut down its music subscription service this September. Napster lost 75,000 subscribers last year, and has started up a non-subscription download store (adjunct to its subscription offerings. .

Lights out for Rhapsody and its subscriptions? Not quite....

Rhapsody still has 1.85 million subscribers, albeit down slightly this year. Rhapsody also opened an MP3 store. More interestingly, it joined forces with Verizon, and that potentially opens its doors to Verizon's 70 million customers.

Verizon customers (with an eligible data plan) can subscribe to Rhapsody and access Rhapsody songs. They can also move songs to their phones, via a PC. Ideally, you could move tunes directly to your phone, but that's not possible yet because Verizon won't permit it. The extra data would bog down Verizon's network.

The problem, of course, is that iTunes is still the online market's gorilla, with sales of 5 billion songs since its opening. And while Rhapsody songs will not play on iPods or iPhones. The question is whether the wider cellphone market can eventually compete with the iPod and iPhone for music playback. If so, Rhapsody with its new Verizon connection (and Verizon's 2,000 stores) might still be a contender. If only consumers will agree to add an extra subscription charge to their phone bill. -Ken C. Pohlmann