Rhapsody/Napster subscriber base hits 3 million, up 50 percent from last year

Rhapsody celebrates 3 million users

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Streaming-music service Rhapsody (known as Napster in some markets) is beside itself with joy over a dramatic increase in its global subscriber base, which it says has swelled by a million users in the last 12 months, breaching the 3 million mark in the process. At no other point in its 13-year history has the company had it this good.

What’s baffling about this sudden change in the company’s fortunes is its timing. It coincides with a sharp rise in competition; a time when everyone from rapper-businessman hyphenates to some of the biggest tech companies in the world have their eyes on the streaming-music pie. So what’s fueling this growth? Well, it’s the competition.

According to the Associated Press, the Seattle-based firm credits rivals like Spotify and Apple Music for helping draw listeners to streaming. Indeed, as recent market data from NPD shows, the whole category is quite literally exploding. Take Spotify, for instance. The world’s largest on-demand streaming service announced last month it had doubled its subscriber base from a year ago to 20 million.

“This is not without some extreme change in our industry. The entrance of new competitors makes us even more confident that we were onto something when we built the first streaming music service back in 2001,” the company said in a blog post announcing the milestone.

Why this matters: In terms of subscribers, Rhapsody is now the third-largest on-demand streaming service behind Deezer and Spotify. That’s quite an achievement for a company that has steadfastly refrained from offering a free, ad-backed tier like some of its rivals. It seems more and more listeners (including those weaned on free music) are beginning to appreciate the immense value these unlimited streaming services offer for just a few dollars per month. This could bode well for Apple Music, which also has a paid-only model.

Rhapsody’s on-demand streaming service costs $10 per month, a price that includes unlimited streaming and offline playback on up to three devices. The subscription also gives members access to a Pandora-like personalized radio service called unRadio, which costs $5 per month on its own.

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