Real Adds Portable Downloads, $100 Subsidy On MP3 Player

By Joseph Palenchar -- TWICE, 4/26/2005

New York — RealNetworks launched its first portable subscription service, dubbed Rhapsody-To-Go, at $14.99 per month, and teamed with iRiver to offer a $100 rebate on iRiver’s H-10 hard-disk-drive (HDD) headphone stereo with the purchase of a one-year subscription.

The rebate will be available to consumers who purchase the H-10 through Real’s Rhapsody site and through retailers, including Amazon and brick-and-mortar dealers. The Real rebate brings the device’s price down to $149 from a current everyday $249, including $30 iRiver rebate. On May 8, iRiver will drop its rebate but will also drop the H-10’s everyday price to $249.

The Real-iRiver partnership takes MP3-player subsidies to a higher level. Napster offers rebates of $45 to $55 on a trio of HDD portables with the purchase of a three-month subscription to its portable download service, called Napster-To-Go.

In another effort to pursue closer relationships with CE manufacturers, RealNetworks said it first-ever music-management software will be available as the default music manager with Olympus m:Robe HDD portables and San Disk’s first HDD portable, all of which play Rhapsody-To-Go downloads. Besides organizing a computer’s music files, the Real software will direct users to Real’s streaming and download sites, including Rhapsody-To-Go and the Real Music Store download site.

“We’re developing closer relationships with consumer electronics makers,” said music services VP Robert Acker. CE makers are open to relationships with streaming and download service providers so they can “integrate tightly” with the services. That would enable consumers to use their devices and software to download music “out of the box” as easily as if they were using an iPod, Acker said. These relationships can help suppliers “compete against Apple’s complete end-to-end control,” Acker explained, referring to the complexity of using many portable MP3 players to download music.

In other announcements, RealNetworks:

integrated its RealPlayer Music Store, which offers non-portable a la carte downloads, into its RealRhapsody interactive streaming service, which also lets users burn a streamed song to CD in Redbook Audio format.
launched tethered downloads from its Music Store, enabling users to store a downloaded song on up to three PCs or laptops.
enabled its protected AAC-based Music Store downloads to be transcoded for playback on Photo iPods. Real songs can already be transcoded for playback on other iPods and on WMA-format portables.

Acker expects the number of MP3 players compatible with portable subscription downloads to grow for the Christmas selling season, when he foresees “a fairly strong portable-to-go push.” Next year “will be the year for portable subscription services,” he added.

By this summer, he said, portables priced above $100 “will start moving” to support portable subscriptions, and he expects the first compatible flash-memory portables to appear during the summer.

With Rhapsody-To-Go, subscribers download files in protected 160Kbps WMA format. When files are downloaded from the Music Store site, files are downloaded in Real Audio 10 format, which can be transcoded for playback on iPods and WMA-compatible portables.