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CHAMP
I was reading news today that Apple is going to allow sales of subscriptions to newpapers, video, and music through iTunes, with all sign up and billing done through your iTunes account.
If a new user signs up through iTunes, Apple gets 30% of the revenue. The story I link to below specifically mentions Rhapsody.
I am trying to decide if this is a good thing, if, in fact, Rhapsody is involved.
On the good side, selling Rhapsody through iTunes could bring in a huge user base. And, with this, it seems like Apple may not start up its own music subscription service that would compete with Rhapsody.
On the bad side, Rhapsody would lose revenue to big, bad Apple, but this could be offset my more customers.
Anyway, here's the link:
http://news.yahoo.com/s/nm/20110215/m...
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Subscriptions sold through iTunes?
Official
Response
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EMPLOYEE
1Hi guys- here is our official statement on the matter...
"Rhapsody offers a content based subscription service that makes millions of tracks available to fans pursuant to longstanding partnerships with thousands of rights holders, all of which then distribute revenues to artists and other creators.
Our philosophy is simple too – an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee vs. a typical 2.5 percent credit card fee.
We will continue to allow consumers to sign up at www.rhapsody.com from a smartphone or any other Internet access point, including the Safari browser on the iPhone and iPad. In the meantime, we will be collaborating with our market peers in determining an appropriate legal and business response to this latest development."
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Wow, 30% of the revenue is nuts. However, to your point, it can introduce visibility and access to a wide range of customers (well, US customers). The assumption being that it costs Rhapsody or any other service at least 30% of the lifetime value to attract and retain that customer, but it also implies that Itunes would significantly increase conversion rates.
The problem I see is that if it just becomes another long laundry list of services, then services like Rhapsody can easily get lost in the weeds.
It would be nice if Apple pitched in some additional benefits to the services for taking 30% of the revenue, such as visible promotion through Itunes, etc.
I'm not sure either on this one, yet.
Interesting, mgibb.Comment -
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EMPLOYEE
1Hi guys- here is our official statement on the matter...
"Rhapsody offers a content based subscription service that makes millions of tracks available to fans pursuant to longstanding partnerships with thousands of rights holders, all of which then distribute revenues to artists and other creators.
Our philosophy is simple too – an Apple-imposed arrangement that requires us to pay 30 percent of our revenue to Apple, in addition to content fees that we pay to the music labels, publishers and artists, is economically untenable. The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple’s 30 percent monthly fee vs. a typical 2.5 percent credit card fee.
We will continue to allow consumers to sign up at www.rhapsody.com from a smartphone or any other Internet access point, including the Safari browser on the iPhone and iPad. In the meantime, we will be collaborating with our market peers in determining an appropriate legal and business response to this latest development." -
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Good. I'm glad you are standing up to their ridiculous 30% extortion.
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Have you made any progress with Apple on this situation ? I would hate to lose Rhapsody on my IPhone ! -
