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rhapsodynapsterlargeRhapsody International says it has surpassed 3 million subscribers combined for its Rhapsody and Napster music services, representing 50 percent growth over the past year, and the fastest expansion period in the Seattle-based company’s 13-year history.

“This is not without some extreme change in our industry,” says Rhapsody in a post this morning announcing the 3 million subscriber milestone. “The entrance of new competitors makes us even more confident that we were onto something when we built the first streaming music service back in 2001.”

Those competitors include Spotify, founded in 2006, which recently announced that it surpassed 20 million subscribers and 75 million active users. Rhapsody has been adding subscribers despite increased competition not only from Spotify but also from Apple, Google, Amazon and many others in the broader market for digital music.

However, Rhapsody’s financial results illustrate the high cost of those additions, with large marketing expenses required to bring aboard new subscribers, in addition to music licensing fees. The company posted a $21.3 million loss in 2014, even as its revenue climbed 23 percent to $173 million, according to financial results disclosed in regulatory filings by RealNetworks, which remains a Rhapsody shareholder following the 2010 spinoff of the company.

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Announcing its new subscriber numbers this morning, Rhapsody said mobile usage is up 60 percent over the past year, and it has had success signing up subscribers in markets where music piracy has long been a problem, such as Italy, Colombia and Brazil. In March, Rhapsody became the first streaming music service to offer full-track playback on Twitter when subscribers share songs with their followers.

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