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Revamped Real music service aims at Napster

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RealNetworks announced its anwer to Napster To Go yesterday, but with the twist that it plans to give away songs in exchange for advertising.

The new incarnation of Rhapsody, Real's music download and subscription service, will provide punters with 25 songs a month free of charge. The catch - a business model not dissimilar from the original Napster's approach - is that the 'Rhapsody 25' version of Real's jukebox software is funded by advertising from Chrysler, Google and others, so there's an added inconvenience.

Ironically, this free-songs-for-advertising is not so far from the way P2P pioneer Napster 1 worked, though of course back then none of the revenue received from advertisers made its way back to the artists whose songs were being shared. Real even went so far yesterday as to talk about music sharing, though of course Napster 2 has been saying the same thing since its launch.

The original Rhapsody subscription service is now called 'Rhapsody Unlimited', and will continue to offer unlimited downloads for a monthly fee of $10, along with ten per cent off any one-off downloads they make, necessary if they're to burn the songs to CD or copy them to a portable music player - or because the tracks aren't licensed for sale by subscription.

Alongside Rhapsody Unlimited, Real launched 'Rhapsody To Go', which makes use of Microsoft's latest DRM technology, 'Janus', to allow users to copy downloaded tracks to compatible portable music players as part of the subscription package, which costs $15 a month. Real was able to name just two compatible players: iRiver's H10 and Creative's Zen Micro. Most Windows Media Audio-compatible music players do not support Windows' latest DRM technology.

The new service's naming and pricing pitch the company against Napster, which Real clearly sees as its chief rival. Not that it's forgotten the market leader, Apple, and company executives said this week that its Harmony DRM translation system is once again compatible with all of Apple's iPods. Expect a firmware update from the Mac maker any day now to disable it again, though it's not like Harmony is exactly herding iPod users from iTunes to Rhapsody, so far as we can tell.

What all this will do for Real's finances remains to be seen. Certainly it hopes the advertising will cover the cost of giving away the free downloads - essentially by subsidising each 25-song-a-month subscription. If not, at least quite a few users may be persuaded into signing up for one or other of the premium packages. Sign up for Rhapsody To Go for a year - cost to you $180 - and buy an H10, and Real will send you $100. So it's already eating into its revenue. And how well punters put up with the 'do you want upgrade?' nagware over time is also uncertain.

All three services are available to US consumers only. ®

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Congress moots mandatory DRM scheme
Real sees revenues up, losses narrow
Apple music store smacked with antitrust suit
Apple iPod out of tune with Real's Harmony
Real '49c a song' promo pushes downloads to 3m
Real anti-Apple poll swamped by pro-Apple posters
Real halves music prices, widens loss
Real to 'free' iPod from iTunes Music Store

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