Digital Music Services Gain New Crop of Investors - NYTimes.com

Excerpt from a digital music market snapshot

Yet those kinds of numbers have remained elusive throughout the history of digital music. Rhapsody, a streaming service begun in 2001, has 750,000 subscribers; eMusic, which sells downloads, has 400,000. Spotify, which has free and paid versions, has 10 million users in Europe, but only 750,000 of them pay (the rate is about $15 a month), a ratio that concerns the record labels.

“Until you get scale, it’s just too hard of a business to work,” said Tom Andrus, who is on the board of Rhapsody.

In another challenge, Apple announced two weeks ago that it would take a 30 percent cut of subscription fees and other purchases through its App Store, a move that digital-media companies of all kinds have criticized as being too steep.

Digital Music Services Gain New Crop of Investors - NYTimes.com