It's been a banner month for Rhapsody CEO Jon Irwin: His Seattle-based music subscription service celebrated its 10th anniversary with Built to Spill at Showbox at the Market, he just announced that Rhapsody has crossed the million-subscriber benchmark, and he recently shaved his head. The latter was his comeuppance on an agreement he made with his employees. He promised them that he'd shave his head if they delivered a million subscribers.
But as he and his staff celebrate their successes, new challenges have emerged. UK-based competitor Spotify has driven the subscription-music narrative, along with its all-you-can eat, six-month trial (on PCs, not mobile devices) that's been wildly popular on Facebook. And Coldplay, the Black Keys and several other big-name acts have held back new releases from subscription services.
Some bands feel they're missing out on revenue from CD sales if they make their records—particularly ones expected to top the charts—available on subscription services that pay fractions of a penny per stream. Irwin thinks that's shortsighted, and has a theory: If you were to add up how much an artist is paid per play from a track that is purchased for 99 cents and then shared on the internet and stolen at will, artists, he contends, are making less per stream than they are on Rhapsody.
"Rhapsody, and services like Rhapsody—premium, on-demand, subscription music services that focus on building a paying subscriber base—they don't cannibalize CD sales," Irwin says, "they cannibalize piracy."