Rhapsody Takes on iTunes, Offers Free Albums on New Store

More evidence of the primacy of digital downloads in the music distribution business: Rhapsody announced today it will offer DRM-free MP3 downloads in a $50 million effort to wrest market share from Apple’s iTunes, which earlier this year became the largest music retailer in the United States. As part of its marketing launch, the first 100,000 sign-ups to the store until July 4th get one album for free, according to Gizmodo.

Previously known for its subscription-based music streaming service, Rhapsody is partnering with Verizon Wireless to offer music downloads on mobile phones and will also be the music store back-end to MTV’s music Web sites and iLike, one of the most widely used music applications on the social networking site Facebook.

Describing their strategy as “Music Without Limits,” Rhapsody executives tacitly recognized the necessity of selling music that can be played on iPods, Apple’s industry-leading digital music player. Said company Vice President Neil Smith, “We’re no longer competing with the iPod, we’re embracing it.”

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