I just read an interesting article about the reality of the music industry from the perspective of the artists vs the mass news articles about the health of large labels. In essence, the internet and digital distribution of music is changing the business model from a tightly controlled big label structure to a more egalitarian structure in which artists have the recording and marketing tools to go directly to the people. Here’s a link to the article that discusses this with Ian Rogers - CEO of Topspin Media – a company that sells tools for musicians to publish their own tunes.

Think about the before and after scenarios:
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I’ve just posted a feature by feature comparison of Rhapsody vs Napster. I selected the elements that are the most important and quantifiable and left out things like look and feel, stability, etc. as those are hard to get hard facts around. Click here to compare Rhapsody vs Napster.

I read the daily Digital Music News email to try and keep up on music business and lately there are lots of stories about stock prices plunging (LiveNation), Stores closing (CircuitCity, Tweeter) and estimates on music sales dropped for the holiday season (Best Buy and Everyone but Walmart). Times are tough for everyone no doubt, but I am not dropping my Rhapsody music subscription and here’s why:’
- I haven’t purchased a new CD is 6+ months. No need to. I can listen to just about everything published without purchasing the CD.
- The artists, writers, publishers of music that I like are still getting paid when I listen – Rhapsody handles all of that (and it’s both complex and intense – believe me).
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Best Buy, a strong retail partner for Rhapsody, has purchased Best Buy to help expand their offerings into subscription services, pair with hardware and compete more aggressively with iTunes music store. Lots of stories about how this will impact Napster (avoid a big internal shareholder fight that was brewing, effectively removes rhapsody from one of the largest retail channels and gives Napster a purpose) but not a lot of chatter about how it will impact Rhapsody. I think a few things will happen:
- Rhapsody will be moved out of the Best Buy channel next year
- Best Buy will use it’s influence to pair Napster with some additional devices
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MTV/Viacom announced today that The Beatles have agreed to let their music be used for the video game Rock Band. This is great news as up until now they have signed NO digital music deals. No iTunes, no Rhapsody, no Napster, no nothing. You can hear The Beatles in radio formats (including on the Rhapsody Channels), but not purchase or streaming. Hopefully this is the beginning of an experiment that will let the music of The Beattles be available everywhere.

Facebook founder and CEO Mark Zuckerberg is reportedly considering entering into the digital music business and becoming a streaming competitor to iTunes and MySpace.

Zuckerberg is in talks with several song streaming services and music community sites including Rhapsody.com, iMeem.com, iLike.com, and Lala.com, sources familiar with the situation said, according to the New York Post.
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Ipsos, a global market research company, says that Apple Inc.’s iTunes, No. 7 in the Internet Retailer Top 500 Guide, still is the alpha dog in the world of fee-based digital music. But Amazon.com Music (No. 1) and RealNetworks’ Rhapsody (No. 89) brands are making inroads.

The fifth annual TEMPO Digital Music Brandscape study, conducted by Ipsos, shows that awareness and use were steady among the most dominant brands this year, but did increase for three top competitors while declining among many lesser-known players. For example, iTunes continued to grow in terms of awareness, usage, familiarity and “best brand” mentions in the study. But Amazon had a strong first year, with initial awareness, usage, favorability and “best brand” ratings comparable to any of the top brands after iTunes. And Amazon matched iTunes in user satisfaction.
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Check it out – Rhapsody has Kid Rock’s entire catalog as an exclusive – no one else has the Kid including iTunes. Here’s a list of the albums you can listen to for free and buy in DRM free MP3 format. You can listen to Explicit or Edited versions of each – Sweet!
– Rock n Roll Jesus
– ‘Live’ Trucker
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Verizon Wireless and Rhapsody have teamed up to bring the subscription music model to cell phones. This partnership expands the Rhapsody DNA platform and once again proves that Rhapsody is more dynamic, far reaching and solid than any other subscription music model like Napster, eMusic, Yahoo! Music (oh, wait – Rhapsody acquired the Yahoo! Music business earlier this year). You can get Rhapsody on TiVO, Sansa MP3 devices, Sonos, Squeezebox, Verizon Phones, Denon Receivers, Panasonic MP3 devices, MAC browsers, Linux browsers and of course PCs – software and browsers.

So, how does it work with Verizon?
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I love Rick Rubin. I think he is one of the great music producers of our time and one of the most versatile guys in the business. The fact that he resurrected Johnny Cash’s career in his twilight with some extremely powerful music puts him high on my personal list. I was reading an article in the New York Times about his role at Columbia Music and a section caught my attention as he was describing the future of music. This is Rhapsody’s model and why I continue to believe that as the internet becomes more pervasive, the subscription model will be important.

“Rubin has a bigger idea. To combat the devastating impact of file sharing, he, like others in the music business (Doug Morris and Jimmy Iovine at Universal, for instance), says that the future of the industry is a subscription model, much like paid cable on a television set. “You would subscribe to music,” Rubin explained, as he settled on the velvet couch in his library. “You’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home. You’ll say, ‘Today I want to listen to … Simon and Garfunkel,’ and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now.”
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