May 2005
Yahoo Gets Into The Groove
By Tim Gray
Buyers beware.
That is the message Internet portal giant Yahoo (Quote, Chart) is
sending the millions who are plunking down big bucks to own downloaded
music. The search firm believes it has seen the future and, for the
most part, it isn't buy-to-own.
Instead, the San Jose-based company today launched an online music
subscription service that enables users to download songs onto portable
MP3 players for $60 per year, or $6.99 monthly, undercutting current
music subscription leaders' pricing.
In contrast, Los Angeles-based Napster and Seattle-based RealNetworks
both charge $14.95 per month, or $180 annually.
The move immediately positions Yahoo, which has an estimated 100
million site visitors per month, as a player to challenge the services
offered by RealNetworks and Napster. Both of those market leaders
charge as much as 60 percent more for their online music services. The
entrance of Yahoo to the subscription market is also seen as a
challenge to Apple's (Quote, Chart) iTunes, which has pioneered today's
conventional method of owning songs, instead of renting them.
"We are committed to being at the forefront of the rapidly growing
online music segment," Lloyd Braun, head of the Yahoo Media Group, said
in a statement. "Yahoo Music Unlimited draws on the best of Yahoo to
provide personalization and community features unlike anything else in
the marketplace."
Yahoo will offer the tracks in the WMA format and Windows Media Digital
Rights Management 10 (WM DRM 10). This support will enable subscription
tracks to be transferred to any portable device that supports DRM
(define) technology.
"From premium radio to an entirely on-demand experience, Yahoo Music
Unlimited has assembled all the key elements to fulfill consumers'
needs," Dave Goldberg, vice president and general manager of Yahoo
Music, said.
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