Filed under: Competitive strategy, Apple Inc (AAPL), Marketing and advertising

Conceding that Apple Inc. (NASDAQ: AAPL)’s iPod will be the digital music player of choice for the foreseeable future, online music downloading service Rhapsody is rolling out a $50 million marketing effort to convince iPod users currently using iTunes to make the switch to Rhapsody. Partner sites include Yahoo, Verizon Wireless and iLike, and the downloads will be in the mp3 format so they have the ability to be played on iPods.

Rhapsody is a joint venture of Real Networks and Viacom, so it’s one of the few on the web music providers that has the muscle to compete with Apple. But I doubt that they’ll be able to. In just a few years, Apple has made itself the biggest seller of music in the country, and sales of music downloads grew about 35% in the most recent quarter, according to the company’s 10-Q.

iTunes seems to be pretty entrenched, and I just can’t see anything compelling coming from Rhapsody that would motivate anyone to switch from iTunes. Rhapsody vice president Neil Smith told Reuters that “We’re no longer competing with iPod. We’re embracing it.”

But now they’re competing with iTunes, and consumers seems to have overwhelmingly embraced that. You really have to question Rhapsody’s — and every other also-ran mp3 seller’s — reason for existing.

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This entry was posted on Monday, June 30th, 2008 at 6:05 pm and is filed under Marketing and Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.