Music subscription veteran Rhapsody continues to grow its customer base, reaching close to 3.5 million paying subscribers by the end of the year. Rhapsody’s user base grew 45 percent this year, and the company’s CFO Ethan Rudin told Variety Wednesday that listening hours are up close to 30 percent worldwide.
Some of Rhapsody’s growth has come from lower-priced tiers launched in conjunction with carriers, like the unRadio service that T-Mobile rolled out in June of 2014. Rudin called unRadio a “petri dish,” saying that it showed that there is demand for services that are priced below the typical $10-a-month music subscription. “We believe that there is lots of room to experiment,” he said.
However, Rudin also admitted that unRadio hasn’t seen much promotion from T-Mobile after its initial launch, which has impacted its growth. “I wish we did more with it when it launched,” he said.
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Rhapsody launched its music subscription service 14 years ago, which makes it the longest-running music subscription service in the U.S. The company operates in many other markets under the Napster brand, which it acquired four years ago.
Unlike market leader Spotify, Rhapsody doesn’t have a free tier. This has made it harder for the company to acquire new users, but Rudin argued that it has also helped to build a more sustainable business. Rhapsody is still losing money because it is investing in growth, he admitted, but added: “We are a lot closer to profitability than anyone else.”
