Rhapsody, a digital music service that pioneered the subscription model now dominated by Spotify, has laid off its president, Jon Irwin, along with 15 percent of its staff, as the service struggles to remain competitive in a crowded market.
Rhapsody International, the service's parent company, announced the changes on Monday in connection with the arrival of a new investor, Columbus Nova Technology Partners, which has become a significant shareholder in Rhapsody in exchange for an undisclosed investment. Two of the firm's principals, Jason Epstein and Andrew Intrater, have joined Rhapsody's board.
The news of the layoffs was first reported by The Verge, a technology news Web site.
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Introduced in 2001, Rhapsody was one of the first services to sell monthly subscriptions for access to huge libraries of music for streaming online. But with the arrival and rapid growth of Spotify — which has a paid tier as well as a free version supported by advertising — Rhapsody has fallen behind. The company says it has more than one million subscribers, although it has not announced specific numbers since it bought Napster, a competing service, in late 2011.
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The layoffs will affect only staff in the United States, and about 200 employees will remain with the company worldwide, a spokeswoman said. Mr. Irwin will continue as an adviser. In its announcement, Rhapsody said it wanted to "accelerate its efforts in Europe and emerging markets."