After browsing around RealNetworks' Q3 earnings release, I saw decent results from its Rhapsody division. Music revenue -- which can be mostly attributed to Rhapsody -- grew 24% to $37.7 million from $30.4 million in Q3 2006. The number of music subscribers -- Rhapsody, Rhapsody-to-Go, premium radio and Music-on-Demand -- rose to 2.75 million, an increase of 50,000 in one quarter and a big improvement over the 1.65 million subscribers in Q3 2006. Judging from the conference call, Rhapsody is key to the company's growth plan. RealNetworks Chairman and CEO Rob Glaser started the call with information about developments and partnerships relating to Rhapsody.

Other notes from the release and the conference call:

• Company revenue increased to $145.1 million with EBITDA of $13.6 million.
• Sales & marketing as a percent of revenue decreased to 36.4% from 40.1%.
• The company booked $7.7 million in advertising with MTV as part of its Rhapsody America joint venture.
• Rhapsody America, a partnership with MTV, is a joint venture that puts Rhapsody's technology platform behind MTV and leverages MTV's marketing muscle to push the venture. A second wave of ads (which I have not yet noticed) has already launched. Rhapsody America is in the consumer awareness phase right now, so there aren't many results to speak of.
• A partnership with Verizon will put Rhapsody's in the hands of Verizon's customer base and generate awareness through Verizon's 2,300 retail outlets. Phase 1 will come in Q1 2008.
• Glaser busted out Metcalfe's Law in explaining the growing potential of Rhapsody. In short, the law says the value of a telecommunication network is proportional to the square of the number of users.

[music jobs] HR Manager at EMI NA; New York, NY.