How Are Verizon and Rhapsody Working Out?
Since Rhapsody started powering Verzion's VCast mobile music service, downloads have improved substantially. According to press releases for quarterly earnings announcements, Verizon Wireless customers "completed" 43 million audio and video downloads in Q3 2008, a 17.8% improvement over the 36.5 downloads in Q2 (the quarter in which the partnership took effect) and a 24.3% improvement over the 34.6 million bought in Q1. During that span, the number of total Verizon wireless subscribers increased only 5.4%.
Over-the-air downloads mentioned by Verizon are tracks purchased for $1.99, not subscription tracks. The Rhapsody-powered VCast music subscription service requires users to transfer subscription tracks and personal music files to the handset from the PC. Subscription tracks cannot be downloaded directly to the handset.
The increase in downloads could be an indication that VCast has more subscribers or that the new service is better at enticing users to purchase music (the former is the more likely). Verizon did not break out the number of subscribers to its VCast music service in its recent earnings release. Rhapsody has not yet given details on new VCast subscriptions but has publicly said they are happy with the early results. "Sign-ups for the first month have been very encouraging, exceeding our expectations," RealNetworks CEO Rob Glaser said in the Q2 2008 earnings call.
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