SEATTLE, WA (Hypebot) –
The spinoff of Rhapsody from Real and MTV became official last week, and armed with a $51 million war chest, the music subscription service dropped its monthly prices from $14.99 to $9.99 on Tuesday. Current subscribers will be kept on the more expensive plan which can be used on multiple devices unless they switch to the new option.
With 675,000 subscribers, that's no small revenue hit, but Rhapsody certainly saw the writing on the wall with competitors like MOG and Napster offering $5 plans. Apple is also believed to be readying a cloud based music service of its own.
Subscription music has struggled do gain traction, but in recent months a plethora of mobile apps have shown the promise of music on smartphones. That, plus the hope that subscription music could be licensed at the ISP level has encouraged increased competition and motivated labels to lower the rates that they charge Rhapsody and its rivals.