The Collapse Begins: Rhapsody Fires Its President, Lays Off 15% Of Its Staff…

Because there are simply too many streaming services, not enough streaming subscribers, and way too many licensing costs involved.  


Which means that from here on out, the number of streaming music services will probably start to shrink.



Which brings us to Rhapsody: effective immediately, Rhapsody president Jon Irwin has been sent packing, along with 15 percent of the entire staff.  The move immediately follows an investment by Columbus Nova Technology Partners, which is slotting principals Jason Epstein and Andrew Intrater as board members to steer things differently.


Updated, 6:15 am Tues.: Rhapsody CFO Adi Dehejia has also been cut, according to details confirmed by the company this morning, with ex-Starbucks executive Ethan Rudin replacing him.  We also have more information on the incoming executive team, which will include Brian Ringer, chief technology officer, Paul Springer, senior vice president, Americas, Thorsten Schliesche, senior vice president, Europe and Rudin as CFO.

Of course, Columbus is pointing to expansive growth prospects in Europe, and great overseas opportunities ahead.  Which is one way to explain away a heavily American layoff, but ultimately sounds like bulls%*t.  Just recently, financial statements obtained by Digital Music News showed roughly $9.2 million in losses for the first half of 2013 alone, a gaping 64% drop from 2012.




Here’s where this gets scary: Spotify’s losses are legendary, but Rhapsody almost exclusively caters to paying subscribers only.  Which means that one million paying subscribers still translates into roughly $20 million in annual losses for Rhapsody.

And this is a good business because…? 


More as it develops.  Written while listening to Above and Beyond.



14 Responses

  1. At last...
    At last...

    “Because there are simply too many streaming services, not enough streaming subscribers, and way too many licensing costs involved.”

    At last. They finally got the message. When any album and any song can be found on YouTube and other similar legal platfmorms for free straming/download, when the majority of major and indie artists upload their own music online, who will pay for a streaming service? Nobody.

    They finally realized that recorded music is not a product any more.

    • Tune Hunter
      Tune Hunter

      Quote on top of your coment is very precise and I agree that well financed Spoofy and Google will exterminate old players and any new comers.

      Statment …”recorded music is not a product any more.” is very ignorant.

      Music is one of the best products for internet marketing and we have 100 billion dollar industry behind the corner. Discovery Moment Monetization is the answer.

    • Visitor

      If streaming services want to be artist friendly, here’s a quick how-to guide:

      1) Increase Ad Revenue

      2) Pay Artists More


  2. Gil

    I really don’t get the cynicism. Does anyone think that a business like Rhpsody going down is good news..?

    Recorded music is indeed a “product” worth paying for no doubt about that. Moneytization is and will come. No doubt about that either. Let me remind all the smarty pants here that even Google knows that YouTube is not a music service…

    • Visitor

      I’m really not sure why there is so much negativity about Rhapsody here considering they pay some of the highest rates to artists & labels in the industry.

  3. GGG

    Yay! Let’s all cheer and hope for the total collapse of the only viable substitute for piracy that anyone has come up with in over a decade!

    • Richard Zedalius
      Richard Zedalius

      Believe it or not, some silly people in here believe they can make people go 10 years back and use Itunes to buy MP3s.

      I am paying for Rdio currently, and if that disappear I’ll just go back to YouTube and GrooveShark. There is NO WAY that I and millions of others will ever pay for an MP3 file. It is an obsolete and dead idea.

  4. oh really
    oh really

    typical lame post on DMN… Rhapsody is the only subscription service that has survived through the years and paid more to artist (non freemium) and is very good for the music biz. I highly doubt Rhapsody is going away anytime in the near future.

  5. jason

    Rhapsody sent out a survey to its users last week and some of us really told them our feelings. I hope they improve.


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