Fred Wilson: What MTV Should Do With Rhapsody


From A VC: I am happy to see a company like Viacom with significant resources so excited about Rhapsody. Rhapsody has been around a long time, has lost money as far as I know since inception, and is still very much a niche service. So the fact that MTV is excited about Rhapsody is a good thing. I hope and expect that they will be investing cash and/or marketing dollars into Rhapsody as part of this joint venture.

I think Rhapsody (or a service like it) is the future of music. It won’t be long until we can connect to the Internet from anywhere and when we can, there will no longer be a need to have files stored locally on any device (ipod, computer, laptop, music server, etc). We’ll just log into whatever music service we use, decide what we want to listen to, and the music will start playing. That’s how it works in my home already.

But not many people seem to understand Rhapsody. The two negatives I always hear are:

  1. people want to own their music (even though they don’t want to pay for it), and
  2. $9.99 per month is too high. People are tired of monthly fees and don’t want another one

I think marketing, real marketing, not the Microsoft style marketing that Real executes, will help with both issues. But the marketing cannot only be about awareness, it also needs to be about the value proposition. All the music, all the time, with the click of a button.

But marketing alone won’t cure what’s wrong with Rhapsody. Here are the things I’d do if I were Real’s new partner, MTV…

1) Offer a subscription plan that incorporates an eMusic style DRM free music download service. For those people who do want to continue to own music, Rhapsody should offer “sample and own’ plan. For say, $20/month, you get unlimited listening plus 30 downloads a month. And Rhapsody will know what you are listening to and can recommend what those 30 downloads should be.

2) Get on more connected devices. Sonos with Rhapsody is the killer product. It takes Rhapsody off the computer and into the living room and gives you a wireless controller so you can change the music without getting up. But there are many connected devices out there and more coming every day. Get Rhapsody on all of them. Make deals with the devices manufacturers to incent them to bundle with Rhapsody. I’d give a year free as an incentive to bundle. Once you’ve had Rhapsody for free for a year, you won’t be able to live without it.

3) Go mobile with a streaming service. I don’t want a cheap Sansa device that is basically an inferior iPod. I don’t want to have to synch a mobile device with Rhapsody to get my files on my mobile device. That’s copying the iPod/iTunes experience with an inferior offering. Blow right past iTunes. Offer me the ability to stream to my mobile device like I do with my laptop and Sonos. I am listening to Rhapsody right now in the back of a car taking me to JFK. We are going 60 mph down the Southern State Parkway and the reception is excellent. Why can’t I have a mobile device like an iPod that does that? That uses the iPod connectors so I can make it work in my car? Or better yet, just give it to me on my phone.

4) Build a social network around Rhapsody. Buy Yottamusic and incorporate all of its features into Build an API that lets any connected device that is running Rhapsody (Sonos, Squeezebox, Phone, Mobile Music Player, etc) report back to Rhapsody what I am listening to and share that with my social network on Rhapsody.

None of these are rocket science. Others have paved the way for all of these moves. There’s nothing new here. Just good product management and common sense. My hope is Real’s new partner, MTV, will force the management of the joint venture to do all of these things and do them asap.

Because Rhapsody is an awesome service. Music dial tone. It would be a shame if the company that invented the future of music didn’t profit from it.

Discuss Fred’s piece here:

Fred Wilson is a partner at Union Square Ventures, an early-stage, New York-based VC firm focused on Internet businesses.  Fred writes a well-read blog, A VC.  Union Square’s past and current investments include Feedburner, Etsy, Tacoda, and