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Real versus Spotify: the battle for subscriptions

Behind the Rhapsody Apple play

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Real is the latest company to goad Apple, taking aim at its selection policy for the iPhone App Store. Real said yesterday it's going to submit a Rhapsody application, daring Apple to refuse it.

In an announcement on Sunday, Real announced and demoed the application, giving subscribers access to its 8 million song catalog. The initial version won't cache songs downloaded from a desktop PC, but this functionality is promised.

It looks a bit like this.

Streaming music rival Spotify has taken a similar very public approach. Both offer a subscription alternative to Apple's own a la carte iTunes download service, which leads the digital music market by 69 per cent, and accounts for one in four songs sold in the US.

But Spotify has much more at stake than its older rival.

Real has other fish to fry, while Rhapsody itself is a sustainable business, gathering $15 per month from every subscriber. By contrast, Spotify gives away the lemonade for nothing, yet it still has to pay pennies for every song it streams. Spotify makes next to nothing from advertising, and needs money coming in, so it's asking for a tenner a month for the mobile client. If Spotify can't get traction with a mobile version for a paid version, then... it's going to need to sell a lot of T-shirts. Or do something else.

We exclusively revealed subscription and advertising numbers from Spotify here.

Real originally offered streaming music from AOL, but acquired Rhapsody from Listen.com in 2003.

Apple's dominance of the music player and digital retail markets has attracted antitrust concern in Europe. Perhaps that explains why Apple bounced Google's telephony app - but has allowed Last.fm and Pandora streaming music applications through the gate. ®

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