Reuters is reporting that Dutch electronics group Philips is forming an alliance with digital media company RealNetworks to offer online music using Philips' music players, the two companies said Sunday.

As the report says, Rhapsody, a joint venture between RealNetworks and Viacom's MTV Networks, is a "distant rival to Apple's iTunes online music store. It also faces competition from Microsoft's Zune Marketplace."

Even as the labels drop copy protection from files sold in online music stores, it looks like the sites that offer all-you-can-eat subscription services will retain the copy protection. That makes sense, since otherwise someone could pay $15 for the first month and then download all 2 or 3 million tracks for free.

Philips partners with Rhapsody for digital music [AP via CNET News]