‘Freemium’ Goes Freer As Rhapsody Tries To Fend Off Peers

What’s the perfect harmony between free and paid in the subscription music world?

For March and April, Rhapsody has upped its usual 14-day free trial to 60 days.

The move is fronted by a wide-ranging ad campaign across MTV channels – likely a benefit of the $33 million in advertising exposure MTV gifted Rhapsody when it span off from Viacom (NYSE: VIA) and RealNetworks (NSDQ: RNWK) (release).

But the real story may be the rationale for the extension. Rhapsody says 60 days is “unprecedented”. Business Insider suggests the promo is to win new customers ahead of Spotify’s seemingly imminent U.S. launch.

That’s highly speculative but a fine point. In the unlimited-access music segment, Spotify is not the only competitor to Rhapsody, which nevertheless predated Spotify, Mog.com, Rdio and the growing wave of such services. A customer acquisition drive at MTV’s expense could be just the thing to lock more users in to Rhapsody, not Spotify, ahead of the latter’s launch, which we would expect this summer or fall.

The pair have quite different approaches to how “free” can convert people in to paying customers…

Spotify Open serves desktop app listeners with unlimited songs and advertising for no cost, though removing ads and playing off the desktop require subs.

— Rhapsody, like Mog though unlike Rdio, offers no free access beyond its free trial, and even that commands a credit card number (how many people become trialists only to cancel later?).

Which approach works best? Neither. Both Rhapsody and Spotify had just over 750,000 paid subscribers each, at their last disclosed counts. Let battle commence…