RHAPSODY KEEPS IT REAL

Online music service RHAPSODY has crossed a price-point frontier, dropping the cost of CD burning for users of its service from 99 cents to 79 cents per track.

Is it mere coincidence that this latest pricing gambit coincides with the launch of RealOne RHAPSODY, a version of the service developed by RealNetworks, which is in the process of acquiring RHAPSODY parent Listen.com? We think not.

The well-regarded service’s operators believe their all-you-can-download subscription model, Windows orientation, substantial catalog of licensed tracks from both majors and indies (over 200,000 of which can be burned to disc) and the cheaper burn fee pose a real challenge to that media-friendly 99-cent emporium, Apple’s iTunes Music Store.

The RHAPSODY folks believe the drop in price will motivate a surge in "burning activity" by current members and also drive a wave of new subscriptions. A special campaign earlier this year featuring 49-cent burning sparked a wave of new membership.

Pundits have repeatedly wondered if PC-oriented services can "compete with free," referring to file-swapping services such as Kazaa (which appears to have dropped its own sporadic capitalization) and Grokster. Interestingly, both of these infamous P2P providers have developed paying models recently, though not along lines preferred by content owners.

But as Apple’s success has shown, online services—if they’re convenient enough—can appeal to upper-demo music fans who have neither the time nor the patience to deal with the swapcos.

Distributors of their own branded versions of the service include Gateway, Verizon Online, Speakeasy, Cablevision Systems Corporation’s Optimum Online and JamBase, among others.