Rhapsody, the monthly all-you-can-eat music subscription service, is becoming an independent company.
Up to now Real Networks and media giant Viacom owned the Rhapsody service. Viacom will reduce its minority stake and turn over intellectual property rights; Real Networks will surrender its majority stake and contribute $18 million in operating capital to get Rhapsody started as an independent business. Once the deal is done, Rhapsody will have no single majority owner.
Rhapsody was one of the first to market in the digital music space and is the largest “pure play” service. However, like all other music services not named iTunes, Rhapsody has been challenged in finding a customer base and audience with its subscription model. In Q3 2009, Rhapsody had about 700,000 subscriptions, down from 800,000 at the start of ’09.
