Jon Irwin, Rhapsody International president, in the company's new downtown Seattle headquarters. (Dan Schlatter/Puget Sound Business Journal)

If Apple is the frontman of the digital-music business, the Seattle region’s big technology companies are more like backup singers. But recent changes in the industry are helping them develop stronger followings of their own.

Seattle-based Rhapsody International, newly spun off from RealNetworks, this week took advantage of better licensing terms from music labels to drop the price of its subscription service, trying to boost its audience. Rhapsody also is capitalizing on the rise of mobile-phone applications to expand its reach.

Microsoft is likewise planning to broaden the potential market for its Zune music service by making it available on upcoming Windows Phone devices.

And Amazon.com has emerged as a challenger to Apple’s iTunes business — using strategic discounting and a massive Twitter following to grab a respectable chunk of the market for MP3 music downloads.

The moves show how changes in technology and the music business have created opportunities for competitors to offer alternatives to Apple’s formidable trio of iTunes software, iTunes store and iPod portable device. The trend promises to solidify the Seattle region’s position in the digital-music industry. It could also open the door for music-related startups to find profitable business models.

“Seattle has always had that vibe. It’s a music town,” said Jon Irwin, president of the newly independent Rhapsody International. “Blending the technology aspect into it, it’s a powerful combination.”

But for now, at least, the region is responsible for a relatively small portion of the overall market.

That’s partly because Seattle’s strength is in subscription-based music, which is a small chunk of the market. Such online services, which offer unlimited access to millions of songs for a flat monthly fee, totaled only 2.1 million subscribers in the U.S. in 2009, according to Forrester Research. By comparison, about 57 million people paid to download music last year from iTunes and similar services that charge for individual songs and albums.

Spending on subscription services was about $209 million in the U.S. in 2009, compared with spending of $1.57 billion on downloads, Forrester said. Paid subscription services have been grappling with the tough economy and facing competition from free, ad-based online services, such as Pandora Radio, that offer a wide selection of music but less control over which songs are played. Rhapsody last year saw its subscriber base decline by about 100,000 users, to about 675,000, according to RealNetworks data.

“Subscriptions are a very niche market,” said Sonal Gandhi, a Forrester analyst. However, she added, subscription rate cuts should help. Rhapsody on April 6 dropped its primary subscription price to $9.99 a month for unlimited music on computers and home media players, and playback on one portable device. Previously it charged $12.99 for a package that didn’t allow for music on a portable device.

Rhapsody also is seeking a wider audience by developing mobile phone apps. The Rhapsody app for iPhone has attracted more than 1 million downloads, and the company on April 6 released a new app for Google Android devices.

“There’s space for a lot of smaller competitors to find their niche,” said Russ Crupnick, a vice president and analyst for market research firm NPD Group. “The question is finding a large enough niche to be reasonably profitable.”

Plenty of companies are giving it a try. MOG Inc., a digital-music and social networking company based in Berkeley, Calif., in December launched its music subscription service, charging $5 a month. Spotify, a popular music service in Europe, plans to launch in the U.S. this year.

Established players include Rhapsody, previously a joint venture of RealNetworks and Viacom’s MTV Networks, which was spun off as part of RealNetworks’ efforts to narrow its focus. Viacom and RealNetworks remain large shareholders, but now neither has a majority stake.

Rhapsody’s Irwin said the newfound independence will give the company the flexibility to move quickly and compete more aggressively. He said he expects Rhapsody to reach profitability by the fourth quarter of this year, generating about $130 million in annual revenue.

Microsoft, which launched its Zune music subscription and download service in conjunction with its Zune music device, has announced plans to expand the service to its upcoming Windows Phone 7 devices. However, that strategy is challenging, as well, given recent trends in Microsoft’s mobile business. The company’s share of the U.S. mobile market fell 4 percentage points, to 15.7 percent, in the three months ending in January, according to a March 10 report from the comScore Networks research firm.

The Redmond company's Zune HD device has been winning critical acclaim for its design, but it remains a distant competitor to Apple's iPod.

Across town, Amazon has been making significant headway in music downloads, capturing 8 percent of the U.S. market in the first half of 2009, according to the NPD Group research firm’s MusicWatch service. That was second to iTunes, which had 69 percent of the U.S. market during the same period. That growth hasn’t gone unnoticed. According to a March 6 report by Billboard magazine, Apple representatives have been discouraging music labels from participating in Amazon’s discount-offering “Daily Deals” to promote their artists’ albums before they are released.

As an example of Amazon’s growing influence, the report said an Amazon Daily Deal promotion “played an obvious role” in the top-of-the-charts debut of “Contra,” an album from the band Vampire Weekend, in January.

Amazon launched the MP3 download business in September 2007, supplementing its online CD sales. Given the increasing focus on digital music among consumers, the decision to expand into MP3s was “a pretty natural evolution,” said Kristin Smith, senior manager of digital music. The company has also been able to leverage social media — with more than 1.47 million people following the AmazonMP3 Twitter account to learn about Daily Deals and other promotions.

“Our Daily Deal program has been very successful,” Smith said, “and when one resonates with our customers, we certainly see a great response.”

Through all of this, Apple isn’t standing still. The company’s recent acquisition of digital music startup LaLa suggests bigger ambitions for its music business, but as of earlier this week, the Cupertino, Calif., company hadn’t said what it planned to do with the technology.