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by , 10:00 AM EDT, May 28th, 2003 has, in a fashion, lowered the price it charges subscribers to burn a song to CD to 79 cents (US) per song. The key word there is "subscribers," because that fee is on top of the US$9.95 subscription fee one must pay to access the service.'s -- which was recently purchased by RealNetworks -- flagship service is called Rhapsody, which is a subscription-based music service that allows you to stream an unlimited number of songs per month. As mentioned above, some, but not all, of the service's songs can be downloaded for burning to a CD, as long as subscribers pay an additional fee.'s FAQ says that the company is working on securing burn rights for more of its catalog. The company also offers other services such as Internet radio, and what the company terms "editorial suggestions" for help in finding new music.

The move to lower its price for burning a song is happening after Apple has had enormous success with its own iTunes Music Store (iMS). Apple charges 99 cents (US) for downloads, and allows those download to be burned to a CD, played on an iPod, and played on up to three different Macs (Rhapsody allows you to log in to its service from any Windows PC). Apple does not charge a subscription fee, which has been part of the allure to Mac users. Most of the services catering to the Windows market, like, have taken the subscription route, with access to the music cut off when your subscription lapses.

The price cut also comes after what says was a 6-week experiment where it lowered prices to 49 cents per track for the right to burn it. At six weeks, the experiment predates Apple's iMS, which was announced on April 28th of this year. is also touting the new price as being the "lowest available cost for music [consumers] what to keep permanently," a clear response to the success of Apple's iMS.

While 79 cents per song is indeed cheaper than Apple's 99 cents per song, one would have to download and pay for 50 songs per month before the US$9.95 subscription fee was paid for. Those 50 songs would cost an additional US$39.50, plus the US$9.95 per month, for a total of US$49.45. Those same 50 songs would cost US$49.50 from the iMS.

Apple announced earlier this month that it had sold some 2 million songs in the first 16 days of operation. sports subscribers reportedly in the tens of thousands, far short of the critical mass needed to make the service a success. The two services offer a similar quantity of songs, with claiming some 25,000 CDs worth of music, and Apple claiming some 210,000 songs.'s Rhapsody is available only to Windows users, and relies on Windows Media Player 8. Currently, Apple's iMS is available only to Mac OS X users. Apple has announced that a version for the Windows market will be available by the end of 2003.

The Mac Observer Spin:

Competition is a grand thing, and lowered prices are one of the benefits of that competition.'s problem, however, is that subscriptions are not what people want, and lowering prices are not likely to help all that much. Most consumers want to be able to own their music, and when you add's pesky subscription fee in to the mix, it's way too expensive to do so in the way.

The company's mistake was buying into Microsoft's vision of renting music in the first place. As we said in yesterday's coverage of a new Microsoft competitor for the iMS, Microsoft does not get that its desire to force people into renting software, music, videos, and books is simply out of sync with the way consumers think. If truly wants to compete with the iMS, the company should seriously consider abandoning its current business model altogether, and adopting one much closer to Apple's.

Alex Allee assisted with this story.

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