As Spotify plots U.S. invasion, Rhapsody fires some shots of its own and touts growth

It seems like years since Spotify first discussed plans to come to the U.S. Now, word is that the highly-touted European music subscription service is set to arrive on American shores some time this week. But Rhapsody doesn’t want you to forget a home-grown service that’s been kicking it in the U.S. for more than a decade.

Today, Rhapsody — which officially split off from RealNetworks last year — said that it has surpassed more than 800,000 subscribers.

Rhapsody President Jon Irwin

“Consumers are more enthusiastic than ever about on-demand music,” said Jon Irwin, president, Rhapsody, in a statement. “The fact that we have added more than 150,000 members since becoming an independent company in April, 2010–a number that we believe exceeds the lifetime total of all new U.S. competitors combined–speaks volumes about the strength of the Rhapsody service and the value it brings to our members.”

One has to wonder if the press release is a pre-emptive strike by Rhapsody. After all, Spotify has a slightly different business model than Rhapsody, one which offers free music streaming of selected tracks for up to 10 hours per month. (After that, customers must cough up some coin, roughly about $7 per month for unlimited access and $14 per month for mobile access).

Rhapsody, on the other hand, charges $10 per month for its base service.

Back in April, GeekWire’s Todd Bishop caught up with Rhapsody’s Irwin and asked him directly about the coming launch of Spotify.

“Obviously they’ve had challenges predicting an entry date, and executing on an entry date, and getting the label agreements in place,” Irwin said.

In today’s release, Irwin took another indirect shot at Spotify when he said “we believe the freemium model is not sustainable at current content cost structures.” He continued:

“Companies with tremendous resources have come and gone, but Rhapsody’s focus on building long-term value is what has set us apart and contributed to our longevity. Consumers love the ability to listen to any song, as often as they like, in any order, anywhere on any device.  The more they embrace a true on-demand experience, the more they will become aware of the shackles of free music services.”

Last month, All Things D reported that Spotify raised $100 million from top venture capital firms Kleiner Perkins and Accel, rumored to be in the range of a $1 billion valuation.

At that valuation, one has to wonder how fast the VCs think it will take Spotify to blow past Rhapsody’s 800,000 subscriber base.

Previously on GeekWire: “Q&A: Rhapsody rebounding after RealNetworks spinoff”

  • Guest

    I’m getting quite tired of Rhapsody’s President beating his chest when competitors encroach upon its business model. The way Rhapsody will succeed is based on its merits, not on the bloviations of its President. Rhapsody may have been an early entrant into the streaming music market, but being first to enter does not entitle a company to perpetual market dominance.

  • Van

    Come on, guest, what do you EXPECT him to say? Responding to a question is hardly bloviating or beating his chest. Don’t be a jerk.

    • Guest

      I expect him not to be asked. When Ford introduce a new car, journalists don’t ask Chrysler executives what they think about it. What a competitor thinks is immaterial – it’s just that some executives are more diplomatic than others.

  • Anonymous

    That ssounds like a lot of fun dude. Wow.

    http://www.web-privacy-toolz.tk

  • Frank Gleason

    How many times do we have to hear about spotify talking out of their ?$&@ about when the may release their app in the u.s. Get Rhapsody and be done with it.

  • Anonymous

    I’ve used Spotify for one month, and I agree with Mark Zuckerberg that “Spotify is so good” (quote prominently displayed at spotify.com).  Good luck Rhapsody.  It’s been nice knowing you Pandora.

  • http://www.appatic.com Avatar X

    Smart buy, at least they got a plan B.

    • Guest

      Apple would be good. Apple have no streaming options for iPhone. Rhapsody should partner with Apple to get their service on iPhone.