Uh, Steve, this package from RealNetworks … it’s ticking

If, as a connoisseur of rhetorical terpsichore, you admired the way Apple artfully tap-danced its way through the FCC’s questions about why it isn’t allowing the Google Voice application into the iPhone App Store, then it should be exceedingly entertaining to watch how it juggles the hot potato it’s about to be handed by RealNetworks, provider of the Rhapsody streaming subscription music service.

The closed iPhone-iTunes system has grated on Real CEO Rob Glaser from the start, and now, by design or good fortune, he’s in a position to stick it to Apple at a particularly vulnerable moment. In a blog post Sunday, Real made a point of publicly announcing that this week it would submit a Rhapsody iPhone app to Apple for review. And company blogger Lacy Kemp cheekily drove the point home, saying, “There is nothing quite as satisfying as needing to hear a certain song RIGHT NOW and being able to scratch that itch. … I can’t even count the number of times I’ve wanted to hear a song on my iPhone and guiltily plopped down $.99 to iTunes to please my impatient self. When I first used the Rhapsody app it seriously felt like the sun shone a little brighter that day.” The app’s first version will be streaming only — no local storing of tunes for offline listening — but Real says that will change with the next version.

With that, Apple finds itself on the tines of a Morton’s Fork. While Real in all innocence can say that Rhapsody’s streaming does not directly compete with iTunes’ selling, it obviously does compete for the attention and dollars of music fans. Like Google Voice, it doesn’t actually replace any core iPhone functions, but it does provide an alternative that is not to Apple’s advantage. The app would give iPhone users an option that Apple can’t be comfortable with: spend $15 a month for unlimited streaming of the vast Rhapsody catalog or spend it on 15 tracks from iTunes. And while the initial appeal may be to existing Rhapsody customers, if Real does follow up with full offline portability, the option gets more tempting to those who aren’t firmly in the “own” camp of the “rent or own music” debate.

So what does Apple do? Approve an app that could distract users from iTunes, or reject it based on the same sort of objections it has raised against Google Voice and other apps, inviting even more accusations of stifling competition and stiffing users, just as those issues are under the regulatory spotlight? You can almost hear Rob Glaser giggling with glee.


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  • Well what this basically attests is that Apple is having to come to terms with the fact that it is a Hardware company that happens to make some software.
    Their revenue model depends on selling hardware not on selling software.
    This may possibly mean that in the next few years or less there maybe a merger between Apple and Google as the two now compete on many areas and yet also have similar cultures and possibly the combination will put the final nail in the cofin for Microsoft.
    If Apple restricts Raphsody it may bring some scrutiny from the FTC and or the Justice Dept.
    Given how things are going a partnership with Google will entail sales of great hardware products with amazing software and services on top of it. Plus the desire to do no EVIL may truly work.
    Yes the folks will say Apple Google will never merge etc.
    We shall see…
    I think Apple is being pushed into a corner with apps that compete with its services even though they don’t really depend on those services to generate huge revenues.

  • Dan C.

    Uh… My comment to Real is: Hey, good luck with that.

    As to the author of this piece, I’m delighted that you are one of the handful of people in the world that enjoys renting music. The rest of us, not so much.

  • sd

    Maybe someone with Rhapsody and/or an iPhone (I have neither) can illuminate why Rhapsody would be so much more attractive to iPhone users than it is to Mac users in general (who have not seemed to have abandoned iTunes in droves for Rhapsody or similar subscription services)?

  • J_small

    Who really cares.. Rhapsody is probably on it’s last leg and this by no means is going to solve anything. With the way the labels screw everyone and a business model that will never make money it won’t matter if this app makes it in or not. if anything apple will let it in just so they can watch it fail. real has never been able to do anything right with the Rhapsody product line. A bunch of deals that go bad, a bunch of money wasted. This is just another failure waiting to happen… We’ll all just have a laugh on Rob Glaser once this fails…

  • RedRat

    “So what does Apple do? Approve an app that could distract users from iTunes, or reject it based on the same sort of objections it has raised against Google Voice and other apps, inviting even more accusations of stifling competition and stiffing users, just as those issues are under the regulatory spotlight? You can almost hear Rob Glaser giggling with glee.”
    And since when does Apple care about stiffing its users or stifling competition??? Where have you been for the past 20 years, living under some kind of rock? Apple has historically done this. Remember back when it complained about running its operating system on cobbled together parts? Apple is completely vertically integrated company, that is in their DNA. They want to make the hardware, software, and provide all the services to its own advantage. Truly a monopoly in sheep’s clothing. It needs and wants its fan-boy base so that it can extract the maximum number of dollars out of its devoted acolytes (who don’t seem to mind giving their cash to Steve so that they can be cool–a fool and his money is soon…..).

  • Abel Ept

    Pandora “radio” is already out there as an iPhone app streaming music. Unless Real does something nasty to change the “user experience” why wouldn’t Apple approve? I can store all the non-iTunes music I want on my Touch now. Will Apple interfere if I have an app that makes managing that easier? Hmmm.

    If one can stream a song, then it’s cached, and if cached then it can be stored for longer (like for the duration of a subscription)… let’s say rather than caching the bits for the song, instead all that’s stored is a header reference lookup so if a song has been streamed to you in the past, if you are connected, you can play it again at will by selecting it (and building playlists that way)… it would be like Pandora, except with a playlist you control…. Would Apple prevent that? Hmmm.

    Agree with baba on this one….. Apple is getting backed into a corner that shouldn’t matter to them….

  • Ray

    Hmm, if Apple gets a percentage of the monthly fee for the application and or subscription service would they really object? If the split is the same percentage as the app store would Real make any money after the supposed cut of the record companies as well?

  • Karlheinz Arschbomber

    I guess Europe doesn’t exist. Doesn’t work here. iTunes does. Steve! Steve!

  • Bryan Harrison

    This is excellent news, but the “gotcha” smugness detracts from the real story. All corporations are identical in that they are all amoral profit machines. That’s their job – to generate revenue. Unregulated, they will use any advantage they can conceive in pursuit of their single goal, including brilliant life-changing technologies, decimation of the environment, empowerment of consumers, and exploitation of employees and customers. A corporate structure is no more capable of “fairness” than a pliers.

    The real news here is that after eight years, regulatory bodies are at least stirring in their long, Republican-induced paralysis. It’s their job to monitor and regulate with long term social goals in mind. Our job as citizens is to see that they do it – that our representatives represent us, and are not suborned, undermined, intimidated, or seduced into representing corporate interests instead.

    The story I want to read with regard to Apple vs. Real is what their lobbyists on Capitol Hill are doing, and who’s listening to them.

  • curmudgeon2000

    DRM, closed proprietary systems, and renting instead of owning — they
    all suck. Neither Apple nor Real are on the right side on this one. They
    won’t get one dime from me. When will consumers stop giving money
    to companies that just turn around and screw them over?

  • drbliss

    What does Apple do? Green-light Rhapsody and let it fail all on its little ownsome like everything else that Real has ever made. Their business models and applications are strictly D-list and always have been. Pay-radio? Helloooo?

  • Roger

    Like someone already noted: Pandora is already available on the iPhone. So are Last.fm and Spotify. Other streaming services are rumored to be working on apps: Netflix, Hulu, etc.

    If Apple rejects Rhapsody’s app, they’d have to remove all of these others from the App Store as well.

  • chaimk

    Agree generally with baba and abel questioning whether Apple cares much about this (and thus has no great motivation to reject a Rhapsody iPhone app). The reason: the iTunes Store probably does not make much money for Apple. Apple makes its money from selling hardware, not music; the latter is simply value-add for the former. Anything that entices people to buy more hardware from Apple — even Rhapsody — will make Apple happy.