Rhapsody Streaming Music App Okayed for iPhones

RealNetworks Inc.‘s subscription music service Rhapsody has been approved for use on iPhones and iPod Touches, the first time Apple Inc. has allowed an on-demand music streaming program on its devices in the United States.

The initial download will be free but new subscribers will have to pay $14.99 a month if they want to try it for longer than seven days.

The service will allow users to queue up any of some 8 million songs, and create custom playlists that will stream to the device as long as the user is receiving a cellular signal or is in a WiFi hot spot.

The application is an improvement on Rhapsody To Go, which allows subscribers to load songs onto their Windows Media Player-enabled phones and MP3 players when connected to a computer for later playback.

Seattle-based RealNetworks is planning to allow subscribers to load songs over the air for later playback in a new version by the end of the year.

Current Rhapsody To Go subscribers will be able to use the new app right away without an extra charge.

“This breaks us out of the non-Apple MP3 player segment and now we can reach the iPod Touch and iPhone audience that was unavailable to us before,” said Neil Smith, vice president of business management for Rhapsody America.

RealNetworks currently has some 750,000 subscribers of its unlimited song streaming service. Some pay $12.99 a month for computer-only access but others pay $14.99 for the ability to move those songs to mobile devices.

The songs will be streamed at 64 kilobits per second, which is lower quality than the 256 kbps for songs offered on iTunes, but will help prevent interruptions.

Rhapsody app users will also be offered the ability to buy songs from the iTunes store. RealNetworks will share in the revenue from such sales.

“We’re giving you the ability to listen to any song you want. The ones you really like, you can plunk down the extra $1.29 and buy,” Smith said.

9/10/2009 12:16 AM RYAN NAKASHIMA, AP Business Writer LOS ANGELES