Rhapsody Case Study

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1. What was the unique value proposition of Rhapsody? Is it appealing? This question is about what is the promised value that Rhapsody will delivered and be experienced by the customer that is serviced by the online music company. Furthermore, is the value that is to be delivered to the customer/user attractive enough to purchase over the competition, beyond simply looking at the idea of subscription music as “appealing”. Unlike retailers that sold individual and multiple song albums, and the multiple services like Apples iTunes who did equivalently the same thing as the retail stores, but added an online download dimension with a mobile music player to store them, Rhapsody went in a different direction. The model of the business focused on subscriptions, at under $10 a month, which allowed unlimited, anywhere from a PC or online capable device, to a vast library of music, albums and artists. Rhapsody also went further by making purchased music able to burned to a CD at a lower price than the competition (Apple) at a rate of 79 cents (compared to nearly $1), which after being burned, the owner of the music could do whatever they wished, including downloading onto a portable music device like the iPod. Overall though, Rhapsody provided, before the onset of competition, a dynamic shift in the way people purchased and played music. 2. Why were customers reluctant to adopt streaming music services? This question is about the struggle and unwillingness of online music customers to fully immerse themselves into the music streaming industry. Generally speaking, the way in which people understood purchasing music and playing it involved CD’s, players, and purchasing via various retailers that provided the products. Much like tapes... ... middle of paper ... ...ne. The company is continuing to grow in popularity, thus the potential advertising campaign may not attract the subscribers needed for the company to stay afloat with struggling revenue and profit margins. Likely, Real could collaborate with a multitude of partners for distribution. Broadband providers (Ex. Comcast and Verizon) cover an extremely large population, provide ads through TV, and deals can be likely cost effective in the long run compared to an uncertain $30M advertising campaign. Another option is retailers (electric) like Bestbuy, which provide a physical outlet, with on-hand assistance, and likely provide subscription service options. This also can go further by being offered by actual hardware vendors, which would distribute items compatible with Real; Phones, Tablets, PC’s, TV’s, MP3 Players, and other devices which need subscriptions to access.

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