RealNetworks Eyes Web Approach to Build Music Market Clout

In a bid to boost the profile of its subscription streaming music offering by making it available to all computer users, RealNetworks said it is testing a Web-based version of its Rhapsody service.

Making a version of Rhapsody work with most Web browsers would make the service more mobile — users could access it from any PC with an Internet connection — and make it compatible with Apple and Linux-based computers.

Currently, Rhapsody, like the music download leading Apple iTunes, uses a software program installed on a user’s machine to access the online music store.

Using a Web-based approach would eliminate the need for such software in some instances, though the services are not expected to offer the same level of storage and organization functions as the full service approach, including the ability to transfer songs to portable MP3 players.

In the Web version, paying subscribers to the full service Rhapsody will be able to stream unlimited songs. A music player will pop up in a separate window when songs are selected for playing. A free trial will offer the public a chance to build a 25-song play-list of their own in the Web version.

RealNetworks CEO Rob Glaser said with the service, his company began “laying the foundation to weave music into the fabric of the Internet” through music-based Web services.

Advantage, Web?

The Web upgrade — a beta version launched today — is seen as the first of many changes coming to RealNetwork’s offerings as it bids to battle Apple’s iTunes and as it begins to leverage the benefits of its recent settlement with Microsoft.

As another part of that settlement, Microsoft plans to begin promoting Rhapsody through its Media Player software — which comes bundled with many new PCs — and on its MSN Music site.

Analysts say the moves add up to a significantly higher profile for Rhapsody at a time when many are predicting a shift away from the pay-per-song approach of the iTunes Music Store and toward more subscription-based services.

For instance, using a Web-based approach would enable other sites, such as fan-based sites about specific artists, entertainment news sites or even blogs, to link directly to the Rhapsody page. RealNetworks hopes to develop a direct-to-song link function, which will be tested on the RollingStone.com site, which Real operates.

Using the Web may also make it easier for prospective customers to try the site, with Real also offering a free membership to promote its subscription service. And analysts say Web-based approaches make sense because users may start there when searching for songs or artists, only to find that the best-known download or subscription sites are now accessible directly through the Web.

Popular Idea

Jupiter Research analyst David Card said the service is a first step toward real, robust Web services in which music is syndicated across the Web much like content is now with RSS.

“The initiative is intriguing,” Card said.

He added that America Online seems to have its eyes on the same niche, where a music site — in its case, the MusicNow site it recently bought — becomes Web-based and can then feed content to other, related sites.

In the case of a portal such as AOL or MSN, that might include everything from news sites and blog sites to e-mail and instant messaging.

“AOL said it could move faster, and integrate music more widely into its other offerings, if it went Web-based. Seems like Microsoft is going the same route with Rhapsody,” Card added.

Microsoft agreed to pay RealNetworks US$761 million and to work with it to develop media-playing technologies as part of a settlement of long-standing anti-trust issues in which Real accused Microsoft of using its operating system dominance to take over the media player software niche.