Looks like Zune is going to have to compete with Rhapsody on its own platform with a new free app:

America’s #1 subscription music service lets you experience 11 million songs on demand. Give it a try for free. If you like it, keep listening to all the music you want on your Windows Phone 7 and online – for just 10 bucks a month.

The Rhapsody App makes it easy to find whatever music you want to hear, wherever you are. Listen to your old favorites or check out the newest releases. Create the perfect playlist or kick back and listen to ad-free radio by artist or genre.

New customers can try it now for free. If you’re already a member, it’s even easier; just install the application, sign in and start listening.

A Rhapsody trial or subscription is required. An active internet connection is required to stream music.

Makes me think about the fact that the costs of this subscription are outside of the app but Microsoft seems ok with that…for now. Anyway, it’s under Music and Video.

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