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The move by Rhapsody comes after announcements by Napster, Amazon, Wal-mart and MySpace that they also plan to sell DRM-free music to consumers.
Depending on which report you read, Apple's iTunes store owns between 70 percent and 85 percent of the music market. Currently, iTunes is the largest music retailer in the U.S. and recently passed 5 billion downloads.
Rhapsody will be teaming with Yahoo and Verizon to try and make a dent in Apple's imposing lead. By using MTV and Yahoo's Web sites, Rhapsody is hoping to get its music store in front of consumers. A $50 million marketing blitz is set to take place over the next year to make consumers aware of the music downloading service.
Whether or not the music downloading public will respond to Rhapsody's campaign is a question for another day.
The biggest change for Rhapsody customers —in addition to stripping DRM—is the change in service. Previously, Rhapsody users paid a flat fee in order to stream music to their listening device of choice, as long as that device wasn't an iPod. Now, however, users are able to download DRM-free MP3 files and, importantly, use them on their iPod.
Speaking to Reuters, Neil Smith, vice president of Rhapsody, acknowledged that not allowing music downloaded through Rhapsody to be played on an iPod was hurting their service. But now with the new strategy, the philosophy has changed.
"We're no longer competing with the iPod," Smith said. "We're embracing it."
The iPod is firmly entrenched as the music player of choice for most people in the U.S. By finally realizing the need to take advantage of the existing hardware, Rhapsody hopes to carve itself a niche in the market when people think of downloading a song.
In addition to iPod compatibility, Rhapsody partner Verizon Wireless adds another twist to the music downloading arena. Verizon customers will be able to download songs and albums to their phone through the VCAST Music service. After purchasing a track or album on a mobile device, the music won't be confined to just that piece of hardware. Verizon customers will then have the option to download the purchased music to their computer where they can, presumably, load it on to their music player of choice.
In a move to entice potential consumers, the Rhapsody service will allow users to preview an entire song before paying to download it. Apple's iTunes store currently only offers users a 30-second preview of a track before cutting it off. Unregistered Rhapsody users will be able to preview 25 songs a month, while registers members will be able to preview an unlimited number of songs.
Rhapsody also takes a shot at Apple's iTunes store by matching price: individual songs can be purchased for 99 cents and whole albums can be bought for $9.99.
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