Listen to Me, TiVo
I give a death metal boy band about as much a shot as making it as TiVo's (Nasdaq: TIVO) new music service through RealNetworks' (Nasdaq: RNWK) Rhapsody.
Really.
Sure, the new offering looks great on paper. Many of TiVo's 4.2 million current subscribers already have their set-top boxes glued to the Web for programming updates. Why not charge them $12.99 a month to deliver unlimited streaming of Rhapsody's growing library of more than two millions songs?
I'll tell you why not. They're already paying as much as $16.95 a month for a TiVo subscription. Do customers really want to spend another $13 for music? Especially when they're going with TiVo over a rival's free DVR service because they're fanatical about consuming video content, not music?
Besides, I can listen to music for free through my TiVo. Whether it's going through Live365.com for Internet radio or playing stuff off my PC after a TiVo desktop software upgrade, is Rhapsody all that compelling?
Yes, it's a great feature for existing Rhapsody subscribers. Now they'll have one more way to milk more out of their existing subscriptions. I just don't think there's a whole lot of overlap between the services, even if they both represent paid subscriptions for something in which inferior alternatives are plentiful yet free.
I don't blame either company for trying. RealNetworks needs deals like these to offset Napster's (Nasdaq: NAPS) growth spurts. TiVo never seems to say "no" to a potential partner. I just see bigger potential in more logical pairings -- like TiVo offering Amazon.com (Nasdaq: AMZN) digital downloads directly into its hard drive -- than a music deal that will sadly fall on deaf ears.
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