Rhapsody's managers were right in predicting more than a
decade ago that consumers would one day flock to subscription music services.
The only problem is, Rhapsody isn't one of the services they're choosing.
According to The Verge, The pioneering music company has laid off 30 workers, or
about 15 percent of its staff and has plans to replace several top managers,
including Jon Irwin, the executive who has led Rhapsody the past three years,
sources close to the company said. Irwin is stepping into an advisory role. The
Verge last week broke the news that Rhapsody was looking to replace Irwin. Also
out is Adi Dehejia, the company's CFO. Dehejia will be replaced by Ethan Rudin,
who was formerly with Starbucks strategy and corporate development group.
Columbus Nova, the investment firm that owns Harmonix, maker
of the Rock Band videogame, has acquired a stake in Rhapsody. The Verge's
sources say that Columbus '
representatives are now calling the shots at Rhapsody. Previously, software
maker Real Networks and Viacom, parent company of MTV, each owned a 47-percent
share of Rhapsody. It isn't clear how ownership is split now.
In the last six months, a number of digital music services
have either replaced top management or are in the process. Sirius XM hired a
new CEO in April, and last week Pandora named a replacement for Joe Kennedy,
the outgoing chief exec. Rdio is also hunting for someone to replace CEO Drew
Larner.
The turnover in the executive ranks and layoffs is just
another sign of uncertainty in web music.
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