Summary:

… and thanks to the SEC, we get to listen in. The participants included Rob Glaser, chairman & CEO; Roy Goodman, SVP & CFO; and Rob Kimbal…

… and thanks to the SEC, we get to listen in. The participants included Rob Glaser, chairman & CEO; Roy Goodman, SVP & CFO; and Rob Kimball, SVP & General Counsel.

Value: Glaser emphasized that the best-case value of the deal could exceed $761 million in goods and services. “We will pay Microsoft predetermined market-rate bounties for new Rhapsody subscribers delivered by Microsoft through the MSN marketing channels. We expect that any such subscribers will increase the net deal to us beyond the $761 million dollars,” he explained. Glaser said that could be true even if, as the terms allow, Microsoft displaces some of the amount it owes by delivering new subscribers. Real is banking on the subscribers sticking around and providing income for an extended period of time. (No idea if Microsoft’s subs have to stick around for a predetermined length to qualify for the bounty.) Glaser described any customers coming from the Microsoft deal “as profitable customers, not just in terms of additional top-line revenue but even when you net out the bounties on a bottom-line basis.”

Promotion: Microsoft will provide Rhapsody with at least 2 billion impressions across its most trafficked consumer sites. In addition, Microsoft has agreed not to promote another music service — even its own — with more prominence that it gives Rhapsody.

Microsoft’s subscription plans: Glaser: “It’s not our place to speculate on what Microsoft would or wouldn’t do in that regard. … We already have the market-leading service in terms of the most subscribers, they listen to the most streams a month so we think this gives an opportunity to expand that lead further.” He said they always assume the two will be competitors.

Integration with MSN: A new version of Rhapsody will download — opt-out — with every new U.S. MSN Messenger client and with every upgrade to the client. Although the “Y” word was never mentioned, this gives Rhapsody the chance to offer IM integration similar to that of Yahoo Music, until now a significant distinction between the two.

Advertising: Real can advertise on Microsoft and will do so when it makes sense.

Enhanced interoperability: This should resolve — eventually — some of the interoperability issues that drive consumers and developers crazy.

Webcast.

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