LoPinto+M+strategy+report

LoPinto M To: Proximity Social networking team From: Michael Lo Pinto Date: February 28, 2010 Subject: Rhapsody strategy analysis

Here is my Rhapsody strategy analysis. Although Rhapsody no longer dominates the Music Services, many analysts still believe this underrated music service will once again rise to the top. Whether Gen Y users will adopt Rhapsody as their primary source for online music streaming depends on whether Rhapsody can prove itself as an independent from its parent companies.

Rhapsody is an online music service once operated my RealNetworks and available in the US only. Launched in December 2001, Rhapsody was revolutionary at the time because it was the first streaming on-demand music subscription service to offer unlimited access to a large library of digital music for a flat monthly fee. Rhapsody’s revenue comes from: · //Subscribers// who purchase the music online. · //Advertising// such as publications in magazines and websites.
 * Profile**

As of February 2006, RealNetworks claimed more than 2.25 million subscribers of whom more than 1.4 million were music subscribers. As of January 2010 Rhapsody possessed a catalog of 9,000,000 songs.

Ultimately, the competitive landscape is shaped by user power. The Rhapsody music library is equal to or greater than other music providers, problem is Rhapsody lacks other features that are offered by the competition. For example, iTunes offers music for the same price as Rhapsody and allows for movie and television show downloads.
 * Competitive landscape**

The primary competition that would pose a threat for Rhapsody is iTunes, Napster, LimeWire, and Pandora. Rhapsody has seen its subscriber base decline steadily, from 800,000 at the beginning of 2009 to 700,000 at the end of the third quarter. To once again rise to the top, Rhapsody has formed a partnership with Yahoo!, replacing Yahoo! Music Unlimited which was the exclusive music service for Yahoo!. This partnership introduces Rhapsody’s award-winning subscription music service to Yahoo!'s largest online music audience.
 * Rhapsody’s Strategy**

The cost of music and a subscription service does not appeal to Gen-Y consumers. With music piracy growing in popularity, I believe that Rhapsody will have to offer more to the consumer (including movie and television show downloads.) If these adjustments are made than I believe Rhapsody will once again dominate the music service industry.
 * Gen- Y implications**

"RealNetworks and Viacom to Separate Rhapsody Into Independent Company." TMC News. 09 Feb 2010. Web. 1 Mar 2010. .
 * References**

"Rhapsody and Yahoo! Announce Strategic Partnership in Digital Music." RealNetworks. 04 Feb 2008. Real Press Release, Web. 1 Mar 2010. .

Rhapsody. 01 Mar 2010. Web. 1 Mar 2010. .