The music streaming business may be more competitive than it was a year ago, but 14-year-old Rhapsody says its prospects have never been brighter.
The company this week released a recap of 2015, highlighting new features and business partnerships for its Rhapsody and Napster music streaming services. The company topped it all off by reporting 45 percent subscriber growth over the past 12 months.
That puts Rhapsody near 3.5 million paying customers, which is a big improvement for the Seattle-based company, but still doesn’t come close to Spotify’s 20 million subscribers.
The news highlights the opportunity sitting in front of Rhapsody as music streaming goes mainstream, but also the fierce competition it’s staring down. Rhapsody was a pioneer in music subscriptions back in 2001, but has since been topped by industry leader Spotify and new challengers, like Apple Music.
Rhapsody has fought to stay relevant by forming partnerships with Google’s Chromecast, Aldi supermarkets and Sonos smart speakers, among others. It has also introduced new features, like special listening modes for kids, a way to share songs on Twitter, and a stripped-down offering that costs just $4.99 called unRadio.
The moves seem to be making a difference on subscriber count, but Rhapsody’s financial health is a little harder to pinpoint.
SEC filings by RealNetworks, which spun the music subscription service off in 2010 and still owns a minority stake in the business, showed Rhapsody has been trading big losses for subscriber growth for years now.
In Q3 2015, Rhapsody showed record revenue of $52.8 million, but also a net loss of $6.3 million. Through the first nine months of 2015, the company lost $27.3 million, up from a $14.3 million loss for the same time period in 2014.
When asked about the company’s finances in an interview with Variety, Rhapsody CFO Ethan Rudin said the company is investing in growth right now, but “we are a lot closer to profitability than anyone else.”