To this end, the popular subscription-music service, which boasts more than 1 million paying subscribers in the U.S., today expands overseas with the acquisition of Napster International. "It's a significant addition to our customer base," says Irwin, of Napster's operations in Germany and the U.K. But those aren't Rhapsody's only international stops—it plans to use this acquisition as a launching pad to take on arch-competitor Spotify in the European market.
The acquisition of Napster International is as much for talent as it is for logistics, a similar strategy Rhapsody followed last November when it merged with the U.S. version of Napster. The German and U.K. Napster teams will join Rhapsody to introduce a co-branded product—think, "Napster, powered by Rhapsody"—and expand on domestic partnerships overseas. "It's a tremendously efficient way of us to enter the international market," Irwin says. "I'd much rather start out with a team that knows the market, biz-dev contacts, distributor partners, and has relationships with wireless carriers, ISPs, and auto manufacturers—as opposed to technically starting there from zero [on our own]."
But Rhapsody isn't launching in Europe simply to inflate its user base—Irwin was clear on the company's focus: "How can we add members to the service that are going to be paying subscribers?"
That's what differentiates Rhapsody from every other service, Irwin argues. The company does not offer an ad-supported freemium service like Spotify; rather, Rhapsody offers a completely free 14-day trial of its service, with access to mobile listening. But after that trial is done, you'll have to fork over up to $9.99 per month to continue.
It's partly why Rhapsody hasn't seen significant success on Facebook's new Open Graph platform. "I think the success that Spotify's had on Facebook—well, Spotify has a very tight relationship with Facebook in terms of the development of their implementation," Irwin says. "And it's seen significant growth in its number of users—and I emphasize number of users on the service, who are not necessarily subscribers."
But the "game and goal" of the service, he says, is to get paying subscribers—not just free users.
"We've had some success on Facebook. Obviously it provides great awareness for subscription music," Irwin adds. "But the question remains whether it's effective in converting people to being paying subscribers versus, say, music transients who want to just listen to music for free and move onto the next allotment of free music they can get."
[Image: Flickr user thomas zasso]