Despite many music download services now turning to DRM-free music for individual song and album sales, Rhapsody still believes subscription based music will catch on even though the iPod is not compatible with unlimited download subscription services. Unlike individual song and album purchases, subscription based services have the advantage in that consumers can download as much music as they like for a flat-rate fee. However, as with anything that sounds too good to be true, there are a few side effects: All music downloaded as part of the subscription will no longer play if the customer cancels their subscription and the music will only play on "PlaysForSure" DRM compatible players, which excludes all iPods, including the iPhone and iTouch.
Up until now, subscription services have not been much of a success overall, particularly with Yahoo Music endings its subscription service in September and Napster losing about 75,000 subscribers over the past year. Despite this, Rhapsody has taken on Verizon Wireless to let Verizon customers with compatible handsets, a suitable data plan and a Rhapsody subscription to transfer Rhapsody's music to their handhelds. The advantage here is that subscribers with a compatible handset don't need to buy a separate music player and can add the Rhapsody subscription to their phone bill. Rhapsody also gets better publicity by promoting its service in Verizon's shops. At this time, customers need to transfer music from their PC to the phone, as Verizon is concerned that giving consumers access to unlimited downloads via the cellular network would clog its network.
Despite the worry about whether consumers would add another subscription cost to their phone bill, Rhapsody claims that it has been doing better than expected ever since it teamed up with Verizon on June 30th. However, an Inside Digital Media analyst believes that Apple's new hot iPhone will limit how successful it Verizon deal becomes, particularly since like the iPod, the iPhone is not compatible with the DRM in Rhapsody's subscription music. JupiterResearch on the other hand forecasts $600 million in subscription sales by 2012 in the US compared to just $235 million in 2007.
