Rhapsody Beefs up Smart TV Offerings, Hints at More Features
The living room used to be the pinnacle of music listening: A big, shiny, multi-component stereo system, preferably with some big speakers stacked up alongside.
With the 30th anniversary of the compact disc just passing, it’s hard to miss the fact that this ain’t how we listen to tunes anymore. “It went away after the earbuds went in,” notes Paul Springer, the new senior vice president of product and design at Rhapsody.
The coming wave of smart TVs means those patterns could be shifting once again. Today, Rhapsody is highlighting its spot in that changing landscape—the Seattle-based streaming music veteran says its service will be available on smart TVs from LG, Panasonic and Samsung, with future plans for Sharp models and an app on Microsoft’s Xbox Live service.
These TV-based services are added to the existing Rhapsody price plans, which offer different levels of access at either $10 or $15 per month. The company, a private joint venture of RealNetworks and MTV, has more than 1 million paying subscribers.
Springer, who recently joined Rhapsody after working across town at Amazon, says the move to digital in-home devices was an obvious move. In focus groups and comments from customers, “the home just kind of kept coming up again and again.”
“It’s not a magical secret that the TV is a central point of media consumption in the home,” Springer says. “To date, I think that putting music on the TV just hasn’t been exciting.”
There are already competitors in the field, but it’s still a developing platform. Rhapsody cites NPD research that forecasts some 20 percent of televisions shipped to retailers this year will be web-connected smart TVs.
Add the millions of Xbox and Playstation Network subscribers, along with early adopters of devices like the Roku or Apple TV, and the living room is clearly the next major target for all digital media providers.
Springer says Rhapsody isn’t counting on its smart TV offerings to drive up its user count. Instead, the company hopes to use the platform to offer a better service to its customers.
That includes streaming with cool features like the ability to start listening to an album at work, and pick up right where you left off at home, Springer says. Rhapsody also tailored its smart TV service with some features intended to specifically appeal to users at home, including a radio version that selects songs and editor-curated playlists.
That radio-like function is the core offering of Pandora, another streaming music service that builds intelligent playlists based on song profiles and user ratings.
Springer says that Rhapsody is charged up by the competition in digital music—still a fertile ground for innovation all these years after Napster—and sees no reason why a ton of different features shouldn’t be added in the future.
“We know that our best customers, in addition to using Rhapsody, use a whole bunch of other services right now,” he says, citing as examples Pandora and Shazam, which detects unknown songs by listening to their sound patterns. “If you combine each of those use cases with the Rhapsody use case, you can solve that problem better for those customers.”
Could that even mean a transition to a freemium model, used by streaming competitor Spotify to rack up what it says are more than 2.5 million users worldwide? Rhapsody president Jon Irwin has repeatedly said that his company could make that leap if it wanted to, but doesn’t see it making economic sense.
Springer declined to talk in detail about whether Rhapsody might yet experiment with a free offering beyond its traditional free trial period. But he indicated there might be some ways to sweeten the offer on the horizon.
“The way I think about it is not around free or fremium,” Springer says. “I think, `What is the best way to establish a relationship with the customer and establishing value in advance of asking them to pay you?’”
As Todd Bishop notes over at GeekWire, you can suss out Rhapsody’s performance by checking out the figures in RealNetwork’s financial reports. Revenue was nearly $38 million in the second quarter, up about 22 percent from 2011. But the company’s losses, about $4.5 million for the quarter, were more than double from a year earlier.
That likely reflects the money that Rhapsody is plowing into added features—but Rhapsody does have other costs, of course, particularly music licensing fees. The RealNetworks financial note is pretty limited and doesn’t break out details of Rhapsody’s performance, so it’s hard to say just where the money is going.