So RealNetwork announced this morning that it is just the latest online music service to offer DRM-free MP3 tracks. What's interesting about this is the press they're getting: Apparently no one realizes that the Rhapsody subscriptions still use DRM. Anyhoo, here are a few links:

Taking the Wraps off the New Rhapsody
BusinessWeek Online

Digital media concern RealNetworks will announce on June 30 a sweeping expansion of its music store, including the launch of its long-awaited partnership with Verizon Wireless that will bring its Rhapsody music subscription service to millions of Verizon Wireless customers.

Additionally, RealNetworks will join the ranks of online music sellers like Amazon in selling MP3 music files without copyright-protection lock technology known as digital rights management, or DRM. Amazon has been selling DRM-free MP3 songs since last year. RealNetworks will begin aggressively marketing its new offerings under the phrase "Music Without Limits."

Apple has been offering DRM-free songs via its iTunes store for some time, but as yet has only EMI in its corner. Rhapsody's songs, as MP3 files, will be compatible with practically every digital player on the market, including Apple's iPod and iPhone product families. Its catalog of DRM-free music will rival that of Apple's.

Until this point, Rhapsody has generally been known as a subscription service, where customers buy memberships for a monthly fee, usually $12.99, then check out music from the service and listen, mostly from their PCs.

The company says it delivers about 5 million songs a day to its subscribers. For $2 more per month, customers can put their music on portable digital players, including those from SanDisk.

Rhapsody to challenge iTunes by embracing the iPod
Reuters

Digital music seller Rhapsody is launching a $50 million marketing assault on Apple's iTunes, offering songs online and via partners including Yahoo Inc and Verizon Wireless, Rhapsody said on Monday.

The songs will be sold in MP3 format, which means users of the Rhapsody service will be able to play them on iPods.

"We're no longer competing with the iPod," Rhapsody Vice President Neil Smith said. "We're embracing it."

Yeah, sort of. Obviously, an iPod-compatible subscription service would be a much bigger deal. I still feel that Apple could make this work, though it would have to cost $9.99 a month or less. Maybe Apple's success with the iPhone 3G pricing model—where a price hike is disguised by a lower upfront cost and higher monthly fees—could be  applied to the iPod market as well.

The press release can be seen here.