Yahoo Music: Trading bad for worse

by Mathew on February 4, 2008 · 6 comments

Yahoo has been saying for some time that it was planning to euthanize its music subscription service, but it wasn’t clear what it would replace the service with. Now it has become clear: Yahoo has sold the operation to Real Networks and will be migrating users to the Rhapsody service — although they will apparently get a couple of months worth of the lower Yahoo price before they have to cough up the $12.99 a month for Rhapsody. I’m sure that will make them all feel much better. Ian Rogers of Yahoo Music has more on the move here.

Although Rhapsody has a free, ad-supported version of its subscription service, the main offering is a paid streaming model, and both the free and paid services are of course all wrapped up in some tasty DRM. But the biggest problem with Rhapsody — and with Yahoo Music — is simple: Most people don’t want to stream their music like a radio station. They want to download it and do whatever they want to with it. Period.

That’s why Yahoo is dumping its subscription service in the first place, because it wasn’t working (Yahoo is doing some other interesting things with music, which I wrote about here). And Rhapsody only has about 1.5 million users of its music service after four years of operation, which isn’t much to write home about. Of course, the Yahoo Music switcheroo is in question — along with virtually every other aspect of Yahoo’s business — because of that takeover offer from Microbeast.

  • Pingback: VentureBeat » Yahoo! ends Music Unlimited service, will the Microsoft bid kill the new service that was likely in the works?

  • Pingback: VentureBeat » Yahoo! ends Music Unlimited service, will the Microsoft bid kill the new service that was likely in the works?

  • Steve Guttman

    Hold on a sec. First of all, some of us really like streaming music–particularly when it integrates really well with your home audio system, like Sonos does. I have a napster subscription which works with my Sonos at home and my PC at work. It's great.

    Secondly. 1.5 M people paying $13/mon is $234 M/yr. How many web businesses are pulling in that much cash? Seems like it must take a lot to get you excited.

  • http://www.mathewingram.com/work mathewi

    Hey Steve — you have every right to like streaming music. I don't.
    And I would argue that the numbers of people who have signed up for
    either Yahoo Music or Rhapsody or any of the other streaming networks
    proves that. 1.5 million people may be a nice little business — and
    no doubt would be for any startup — but a) most of that goes towards
    licensing fees, and b) realistically speaking 1.5 million for a
    company like Yahoo or even Real for that matter is chicken feed.

  • Steve Guttman

    Hold on a sec. First of all, some of us really like streaming music–particularly when it integrates really well with your home audio system, like Sonos does. I have a napster subscription which works with my Sonos at home and my PC at work. It's great.

    Secondly. 1.5 M people paying $13/mon is $234 M/yr. How many web businesses are pulling in that much cash? Seems like it must take a lot to get you excited.

  • http://www.mathewingram.com/work mathewi

    Hey Steve — you have every right to like streaming music. I don't.
    And I would argue that the numbers of people who have signed up for
    either Yahoo Music or Rhapsody or any of the other streaming networks
    proves that. 1.5 million people may be a nice little business — and
    no doubt would be for any startup — but a) most of that goes towards
    licensing fees, and b) realistically speaking 1.5 million for a
    company like Yahoo or even Real for that matter is chicken feed.

Older post:

Newer post: