Rhapsody to Better Compete Against iTunes with MP3s and $50 Million

By July 01, 2008 1 comment

Digital music retailer Rhapsody is aiming to make competition with rival iTunes a lot fiercer with a marketing campaign that is said to be worth around $50 million. ITunes has long been the premier destination for digital music since its inception in 2003, but with its newest marketing partnerships and advertisements, Rhapsody hopes to put a significant dent in the company’s sales. The digital music retailer, owned by Real Networks and Viacom’s MTV Networks, has brokered deals with Yahoo and Verizon Wireless among other retailers in order to appeal to a wider


Its original format of a monthly subscription fee similar to Netflix whereby users pay around $15 for unlimited downloads has not done the company much business, and with $50 million in marketing, Rhapsody hopes to change the tide.

The downloadable songs will be available in MP3 format for the first time, a significant move that embraces Apple’s iPod instead of trying to compete against it.

Previously, Rhapsody did not offer MP3 songs in order to dissuade customers away from the iPod in favor of other digital music players like Microsoft’s Zune Media Player.

Opening up Rhapsody’s songs to the iPod should broaden its customer base, considering the digital music player is the premier model in the market by far.

The marketing campaign will also flow through MTV Web sites and the popular Facebook application iLike.

Verizon Wireless will offer Rhapsody music downloads via its Verizon VCAST music service, whereby users purchase and download songs that can then be transferred to a computer.

Most of the $50 million marketing campaign will utilize the advertising space provided by MTV Networks vast array of media outlets over the next year.

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