Kara Swisher

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Exclusive: Rhapsody Selects Former MySpace Product Exec as Independent Board Member for Spinoff

Tom Andrus, former MySpace product head, has been selected to be the single independent board member of the newly independent Rhapsody digital music service.

Andrus (pictured here) joins a pair of directors from each of Rhapsody’s large shareholders: Bob Kimball and Mike Lunsford from RealNetworks (RNWK) and Wade Davis and Van Toffler from Viacom (VIA).

Andrus–who mostly worked at MySpace under the tenure of co-founder and CEO Chris DeWolfe and President and co-founder Tom Anderson–left the troubled social networking site last year.

He had been doing some consulting for Rhapsody and had considered working there too. After deciding against it, since he lives in the Los Angeles area, he said he was asked to join the board.

“I liked what I saw,” said Andrus in an interview with BoomTown. “Rhapsody is really ready to blossom and poised for some real growth.”

The Seattle-based Rhapsody spun off from RealNetworks earlier this month and has plunged into efforts to expand its offerings and become profitable.

These include a price cut for its subscription to $9.99 from $15 and aggressive mobile efforts, such as a Wi-Fi app for Google (GOOG) Android smartphones.

RealNetworks owned 51 percent of the Rhapsody, and Viacom’s MTV Networks the remainder. Restructuring gave both companies a 47.5 percent share. The rest is
allocated to the employee pool and outside investors, including Universal Music Group.

Jon Irwin is president.

For a new company, Rhapsody is one of the oldest in the music space, founded in 2001 by Listen.com.

Listen.com was bought by RealNetworks in 2003, and Rhapsody became its flagship brand as a music service offering.

But Rhapsody quickly lost ground to savvier competitors like Apple (AAPL) and its innovative iTunes service.

Rhapsody, along with Best Buy’s (BBY) Napster, has sold music via monthly subscription, as opposed to Apple’s (AAPL) a la carte download offering.

But Rhapsody has not been able to gain much traction, despite years of effort.

RealNetworks and Viacom’s MTV created a joint venture in 2007 to try to goose it, which did not work either, before the recent formation of the privately held independent company.

Currently, hotter services, such as Spotify, are getting more attention, but Andrus said Rhapsody can compete.

“The company has been through the storm and is ready to win,” he said.


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