If Real wanted to sell Rhapsody, who'd buy?
Rhapsody certainly appears to be a drag on RealNetworks' earnings. According to the company's financial filings for the third quarter of 2009, its music businesses--which include Rhapsody and sales of music through the RealPlayer store--posted an operating loss of $10 million. That's better than the $25 million operating loss in the same quarter of 2008, but the fundamentals aren't improving. Subscriber numbers are down from about 800,000 at the beginning of 2009 to about 700,000 at the end of September. Revenue was down about 7 percent from the previous year. Gross margins are the lowest of RealNetworks' four business segments, thanks mainly to content licensing and delivery costs. The company is bound by its agreement with MTV Networks, which owns the other 49 percent of Rhapsody, to spend more than $200 million on advertising with MTV over the course of their agreement--an additional expense. On a strict financial basis, this is a tough business to justify.The replacement of founder Rob Glaser with a new CEO, Robert Kimball, on Wednesday could pave the way for a sale. But to whom? One candidate would be MTV, the other partner in the joint venture. But after more than two years, I wonder if MTV might be getting cold feet as well--as Peoples points out, online music sales work best as a loss leader for other products, such as iPods and iPhones for Apple or consumer electronics gear for Best Buy (which owns Napster). Without guaranteed advertising payments from RealNetworks, how will MTV do any better running Rhapsody on its own than it did during the partnership?I see two better candidates: Apple and Google. Apple could combine Rhapsody's technology with iTunes and its recent acquisition of Lala to give consumers ultimate flexibility in how they buy and consume music on their iPhones and iPod Touches--single-song downloads, cloud-based music storage, and on-demand streaming would all be available. Google could use Rhapsody, which is already available for Android phones, to improve Android's not-so-great music story--imagine it as a sort of turnkey answer to the iTunes Music Store, although it would be up to Google to figure out how and whether to add single-song downloads in addition to subscription services. More importantly, both companies have the cash flow to keep supporting Rhapsody at its current burn rate, the brand mojo and advertising budget to push it into the mainstream, and big revenue streams--hardware for Apple and advertising for Google--that could justify the investment.
Apple bans Chinese bookstore app over 'illegal content'
Apple bans Chinese bookstore app over 'illegal content'
Apple's iTunes Store in China has kicked out an iOS app that offered electronic versions of books banned by the Chinese government.Hao Peiqiang, the developer of the bookstore app, yesterday posted a letter that he received from Apple informing him that the app would be removed, because "it includes content that is illegal in China."Apple's letter explained that while the app is no longer available in China, it can still be downloaded from the iTunes store in other countries.Apple's form e-mail didn't specify which content was illegal. Known as "Jingdian Shucheng" (loosely translated as Classic Bookstore), the app offers 10 different book titles.The app's description itself stresses that people must be 17 years or older to download it and indicates that it contains profanity or crude humor; sexual content or nudity; fear themes; realistic violence; and cartoon or fantasy violence.Despite the app's seemingly objectionable themes, Hao speculated that the "illegal" items were actually three books from Chinese writer Wang Lixiong. Wang has written about Tibet's struggle to assert its independence from China, prompting the Chinese government to ban his books.Wang's entry on Wikipedia describes him as "a well-known Tibetologist, specialist, and critic of Chinese-Tibetan relations" and "regarded as one of the most outspoken dissidents, democracy activists, and reformers in China."Related storiesApple CEO apologizes to China over warranties, offers fixesGame maker: Apple banned our sweatshop iPad gameApple: China is an 'extremely exciting' market for usChinese animation studio sues Apple over iTunes Store salesThe decision to remove the app comes soon after Apple CEO Tim Cook tried to mend fences in China by issuing an apology over Apple's warranty policies in the country."Friends of mine tell me that Apple has had a censorship policy in place for at least two years so I'm not sure if my app's removal has anything to do with Apple's recent trouble," Hao told the Financial Times (subscription required). "But the app has been operating normally for the last two months until now without any problems."If Apple did ban the app based on China's objections to Wang's books, a certain irony arises. One of Apple's famous late '90s "Think Different" posters celebrated the Dalai Lama, though the poster itself was never used in the actual ad campaign. The Dalai Lama himself has earned the wrath of the Chinese government for his strong pro-Tibet stance.CNET contacted Apple for comment on the app's removal and will update the story if the company responds.
Apple's iTunes Store in China has kicked out an iOS app that offered electronic versions of books banned by the Chinese government.Hao Peiqiang, the developer of the bookstore app, yesterday posted a letter that he received from Apple informing him that the app would be removed, because "it includes content that is illegal in China."Apple's letter explained that while the app is no longer available in China, it can still be downloaded from the iTunes store in other countries.Apple's form e-mail didn't specify which content was illegal. Known as "Jingdian Shucheng" (loosely translated as Classic Bookstore), the app offers 10 different book titles.The app's description itself stresses that people must be 17 years or older to download it and indicates that it contains profanity or crude humor; sexual content or nudity; fear themes; realistic violence; and cartoon or fantasy violence.Despite the app's seemingly objectionable themes, Hao speculated that the "illegal" items were actually three books from Chinese writer Wang Lixiong. Wang has written about Tibet's struggle to assert its independence from China, prompting the Chinese government to ban his books.Wang's entry on Wikipedia describes him as "a well-known Tibetologist, specialist, and critic of Chinese-Tibetan relations" and "regarded as one of the most outspoken dissidents, democracy activists, and reformers in China."Related storiesApple CEO apologizes to China over warranties, offers fixesGame maker: Apple banned our sweatshop iPad gameApple: China is an 'extremely exciting' market for usChinese animation studio sues Apple over iTunes Store salesThe decision to remove the app comes soon after Apple CEO Tim Cook tried to mend fences in China by issuing an apology over Apple's warranty policies in the country."Friends of mine tell me that Apple has had a censorship policy in place for at least two years so I'm not sure if my app's removal has anything to do with Apple's recent trouble," Hao told the Financial Times (subscription required). "But the app has been operating normally for the last two months until now without any problems."If Apple did ban the app based on China's objections to Wang's books, a certain irony arises. One of Apple's famous late '90s "Think Different" posters celebrated the Dalai Lama, though the poster itself was never used in the actual ad campaign. The Dalai Lama himself has earned the wrath of the Chinese government for his strong pro-Tibet stance.CNET contacted Apple for comment on the app's removal and will update the story if the company responds.
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