It's not just Sirius XM Radio (Nasdaq: SIRI) that sees an opportunity in premium streaming on Apple's (Nasdaq: AAPL) iPhone and Wi-Fi-friendly iPod touch. RealNetworks (Nasdaq: RNWK) is submitting its on-demand streaming app so it can undergo Apple's notorious review process this week, according to the company's official blog.
Subscribers to RealNetworks' Rhapsody will be able to stream all of the 8 million-plus songs in the service's library through the app. Unlike Sirius XM's app -- with which subscribers pay between $2.99 and $12.95 for access -- the RealNetworks app is being made available at no additional charge to its paying members. Rhapsody To Go subscribers who are already paying $14.99 a month for the service will simply have one more appliance to access their queues, saved playlists, and personal libraries.
This is obviously great news for current Rhapsody subscribers with iPhones, but will it help drum up new leads? Doing so won't be easy. App Store shoppers appear to be a thrifty bunch. The most popular applications are the ad-supported freebies. When they do shell out for a download, it's typically a one-time $0.99 purchase.
Sirius XM knows this all too well. It was quick to brag about notching a million downloads within its first two weeks of availability. However, when it came time to respond to how many of those free downloads are resulting in paying subscribers, CEO Mel Karmazin broke out the fire hose.
"The numbers -- and breaking it down -- is not something that we're doing," he noted earlier this month, during the company's second-quarter conference call. "You should not consider them to be a very significant number related to our number of subscribers."
Rhapsody is going to have an even trickier challenge, because at least Sirius XM offers more than just music. Rhapsody's ability to check out the latest music charts guarantees fresh music, but it's still competing against ad-supported App Store favorites Pandora, Slacker Radio, Yahoo!'s (Nasdaq: YHOO) Y! Music, and CBS' (NYSE: CBS) Last.fm.
The silver lining is that Rhapsody has been battling against these same sources of free Web radio for years, and it has survived as a premium service. It's also been at the forefront of convergence. It turned heads when its service became available on TiVo (Nasdaq: TIVO) boxes two years ago.
RealNetworks also has to be commended for following the Netflix (Nasdaq: NFLX) roadmap. It doesn't charge extra for streaming, yet it continues to expand the breadth of consumer devices that can do exactly that.
This service may not help land too many new subscribers, but it's a great way to retain the Rhapsody fans it already has.
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