Rhapsody To Go?

I have been using Real’s Rhapsody service for over a year and absolutely love having close to a million songs at my fingertips from any computer. Imagine my joy at being able to listen to a large collection of albums by Pink Floyd or U2. The only regret I had, was not being able to listen to these songs in my car or while on the road. When Napster came out with their Napster To Go service, Rhapsody also came out with a similar service. So I recently decided to bite the bullet, pay the extra $5 per month and upgrade to the Rhapsody To Go service. I went over to Circuit City and got a Sandisk Sansa m230 that allows me to take my MP3s and Rhapsody’s subscription music along with me. This little device has been absolutely terrific and can also double as a flash drive to transfer files between computers. Since it is made by Sandisk (SNDK), I did not have to install any software and my XP machine recognized it instantaneously. Before buying the m230, I first bought the Sandisk Sansa SDMX2 and returned it the next day when I found out that it does not support Rhapsody To Go or any other subscription music service.

Naturally I also analyzed the stock at the same time and while I loved the service, I was not equally impressed by the stock. Real (RNWK) was burning money and also had a ton of competitors such as Napster, Apple’s iTunes and Yahoo Music Unlimited. A couple of things changed within the last couple of months that is making me reconsider the stock. Yahoo (YHOO) doubled the price of its Yahoo Music Unlimited To Go service (the introductory price of $5/month was way too good to last), Real swung to a profit in the latest quarter and to top it all off Microsoft (MSFT) settled a lawsuit filed by Real by agreeing to pay Real Networks a whopping $761 Million ($460 in cash and the rest in advertising credits). The stock jumped up more than 50% in less than 2 months and I plan to continue watching it closely and may just about start a position in Real if the story continues to unravel satisfactorily.