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Rhapsody hits 2 million paid members

The pioneer in subscription streaming music hits a subscriber milestone six weeks after teaming up with T-Mobile on a discounted service, a model Rhapsody will move to France.

James Martin/CNET

For Rhapsody, being first meant the road to 1 million members was a lot longer than the hop to the 2 million milestone.

Rhapsody, a trailblazer in subscription streaming music, said Tuesday it has reached its 2 millionth paying member. The company, which essentially invented the all-inclusive music subscription model in 2001, took a decade to hit its first million subscribers in December 2011. The second million comes a year and a half later.

Despite its first mover status, Rhapsody has been overshadowed in recent years by the likes of Spotify, Beats Music, and the offerings by companies like Google and Amazon, which benefit from their giant size giving their new services automatic recognition. While the 2 million marker puts Rhapsody well behind market leader Spotify, which announced 10 million paying members in May, it puts it far ahead of Beats Music, set to become part of Apple in company's $3 billion acquisition of headphone maker Beats Electronics. Beats had 250,000 subscribers as of May, after four months operating with a high-profile partnership with AT&T, the second biggest carrier in the country by number of customers.

"All the major player are jumping into this space. Jumping in is the easy part," said Paul Springer, chief product officer of Rhapsody, in an interview with CNET News. "Learning how to swim in the deep and growth is the hard part."

Springer said that reaching the 2 million mark so quickly is significant as many entrants -- Beats, Amazon, Apple with iTunes Radio -- are competing in the same arena. Though still a relatively new and untested format, subscription streaming, in which members pay a flat rate monthly to for all-you-can-eat access to huge catalogs of songs, is one of the fastest growing sectors in music sales.

The milestone also comes after Rhapsody disclosed 1.7 million members in April. Since that time, the company launched a high-profile carrier partnership of its own, "unRadio" with T-Mobile in the US in June.

It's a model Rhapsody plans to move overseas. Tuesday, Rhapsody said it would launch a similar offering through its international arm, Napster (yes, that Napster), in France with the country's second largest mobile operator, SFR. Called Napster Découverte, or Napster Discovery, it will be available for 3.95 euros a month.

The Rhapsody unRadio concept differed other streaming/carrier partnerships in the US by offering a modified on-demand streaming service at an outright, unending discount to T-Mobile customers. UnRadio -- which has no ads or skip limits but walls off the number of songs you can hear on-demand at 25 -- is a dollar cheaper for any T-Mobile customer at $3.99 a month, and it's totally free to customers on a T-Mobile unlimited data plan.

AT&T's deal with Beats Music and Sprint's with Spotify offer customers extended free trials of a music subscription service but later charge individuals the same amount anyone else would pay. (Both the AT&T-Beats offer and the Sprint-Spotify offer have discounted options for customers on a family plan.)

In addition to moving the "unRadio" format to France, Rhapsody said Tuesday that it has launched its Premier subscription service in several new Latin American countries though its existing partnership Telefónica's Movistar.