Rhapsody is set to take on Apple’s (AAPL) iTunes, Amazon’s (AMZN) MP3 store, and Napster (NAPS) with a new, long-awaited DRM-free music store, launching today. The RealNetworks (RNWK) – MTV joint venture has deals with all four major record labels (and several indie labels) to sell more than 5 million DRM-free MP3s via the new store. Its unique feature: Instead of 30-second samples, you can listen to full-length songs before you buy them.
Rhapsody will also power full-length music sampling (up to 25 songs per person, per month) and MP3 sales for iLike (including apps on Facebook, MySpace, etc.), Yahoo (YHOO), MTV Networks (VIAB), and Verizon Wireless.
Rhapsody is pushing this as a game-changer, but the reality is that they’re now the third retailer, following Amazon and Napster, to offer all-MP3 downloads. And neither of those two competitors seem to have gained ground on iTunes, which only offers DRM-free tracks from one major — EMI.
And in any event, selling individual songs for download is a low-to-no-margin business. Rhapsody’s core business remains one that has yet to take off: Monthly, all-you-can-eat subscription plans. The move to DRM-free is important for Rhapsody, but only because it helps it stay afloat — if it didn’t have it when its competitors did, it’d be dead in the water. Next trick: trying to gain some momentum.
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