Rhapsody Takes Shot At Spotify's Biz Model

Rhapsody announced Monday that it surpassed the 800,000 subscriber mark for its music subscription service. The company has added 150,000 subscribers since being spun off from RealNetworks in early 2010, according to a statement by Rhapsody president Jon Irwin.

The gain brings Rhapsody beyond the 775,000 subscribers it had at the end of the fourth quarter of 2008 and even to its subscriber count at the end of the first quarter of 2009. Rhapsody was touting 750,000 subscribers just a few weeks ago, in a June 29 interview with chief product office Brendan Benzing at paidContent.

Do Rhapsody executives have Spotify on their minds? Yes, it appears so. The announcement comes during the week Spotify is expected to launch in the U.S. and a quote from Irwin contains a veiled reference to the hyped European music service and its business model. "We believe the freemium model is not sustainable at current content cost structures," Irwin stated. "Companies with tremendous resources have come and gone, but Rhapsody's focus on building long-term value is what has set us apart and contributed to our longevity."