Open secret: Rhapsody tops $35 million in quarterly revenue, gets closer to profit

Rhapsody, the subscription music service based in downtown Seattle, has been a private company since spinning off from RealNetworks as a standalone venture. That means Rhapsody doesn’t report its quarterly numbers publicly.

But Rhapsody’s financial results are actually revealed in an ongoing series of little-noticed footnotes in RealNetworks’ regulatory filings with the SEC.

Using those footnotes, and filling in the gaps with a little math, GeekWire was able to pull together this basic picture of the company’s results: Despite competition from Spotify and other newcomers, Rhapsody has been growing steadily over the past year, topping $35 million in revenue in the first quarter, an increase of more than 8 percent.

On the bottom line, the numbers show the company narrowing its quarterly loss to a little over $1 million — on an apparent path to profitability, although not as quickly as it might have hoped.

One Rhapsody executive previously told news site PaidContent that the company was expecting to become profitable in the second half of last year.

Rhapsody this week confirmed the accuracy of the numbers reported by RealNetworks but declined to comment further, citing its status as a private company.

In December of last year, Rhapsody said it had topped 1 million subscribers for the first time in its history, leveraging its MetroPCS partnership and its acquisition of the Napster music service from Best Buy. Rhapsody has also benefited from its mobile strategy, offering its music service through apps across of a wide range of devices.

RealNetworks reports the basic Rhapsody numbers in a footnote because it still owns 45 percent of Rhapsody — down from 51 percent prior to the spinoff of the music service. That number had previously been 47 percent but dropped after Best Buy took a minority ownership stake in Rhapsody as part its sale of Napster.