Now You Hear It

Now that Napster's gone, we're left wondering how not only survives but thrives.
Magazine Contributor
2 min read

This story appears in the December 2002 issue of Entrepreneur. Subscribe »

Vital Stats: Rob Reid, 37, founder and chairman of

Company: Online music company offering Rhapsody, a streaming music service, for $9.95 a month

Subscribers: Tens of thousands

Dual Tones: "One rule when I was a VC was to never back a company without a soul. Well, my two big loves are the Internet and music, and I felt it was possible to build an Internet company where people are really fired up and enthused, and music is something people are very passionate about. That was a real lure to me."

"We've done a lot of things to create a Web that connects every song, every artist, every album and style of music with countless links to other music."

Competition? "There are five major record label groups, and we have full catalog agreements with all of them. None of our competitors do. Unlike the limited access they offer, our service is unfettered and CD quality. It really replicates ownership."

Pirates Beware: "Pirating music is becoming an increasingly annoying, time-consuming process. Back in the days of Napster, it was extremely fast and efficient because of a directory it maintained, but the pirated systems out there now don't have this. Most people value five to six hours of time more than $10."

Musical Chairs: Reid moved from CEO to chairman in 2001 to concentrate on certain aspects, including the law. "It's been very clear that the rules of the road for intellectual property online are being created by lawmakers. I'm a member of our small and very effective industry group, the Digital Media Association, and have traveled to Washington, DC, numerous times to participate in the policy process."

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