Rhapsody announced Monday it has received added an investor and will restructure the company. Jon Irwin will step down as president and will continue working with the company as a strategic advisor.
Investment firm Columbus Nova Technology Partners has become a "significant shareholder" in the Seattle-based digital music service. The firm has a modest portfolio of science and technology companies such as 42Floors, an online database of office spaces, and genetic information startup GenePeeks. Two Columbus Nova partners, Jason Epstein and Andrew Intrater, have joined Rhapsody's board of directors.
The layoffs will affect 15% of Rhapsody's staff and focus on U.S. operations as additional resources are added to European operations. Rhapsody's services in Europe stem from the company Jan. 2012 acquisition of Napster's international business.
Columbus Nova's Epstein believes the service is primed for growth in Europe. "We’ve recently launched the Napster music streaming service in 15 additional countries in Europe, rolled out a partnership with MTV in conjunction with German wireless carrier ePlus and have a strong pipeline of product innovations and global partnerships in place,"
Rhapsody has formed an executive operating committee consisting of Rhapsody executives Brian Ringer, chief technology officer, Paul Springer, senior vice president, Americas, Thorsten Schliesche, senior vice president, Europe and new chief financial officer, Ethan Rudin, a former executive at Starbucks.
The changes at Rhapsody coincide with a flurry of activity in the digital music space. Apple will launch iTunes Radio Wednesday. Pandora just named online advertising veteran Brian McAndrews its new CEO, President and Chairman. On-demand subscription service Rdio announced a partnership with U.S. broadcast radio giant Cumulus Media.
Digital music services have two options: grow or die. Rhapsody has over one million subscribers but its growth appears to have stagnated. With Spotify setting the pace and the long-awaited Beats Music believed to be set for a fall launch, competition for listeners and paying customers is fierce.