Yahoo's Big Play In Online Music
Internet Giant Aims to Shake Up Nascent Industry
With Subscription Rates Well Below Rivals'
In an aggressive attempt to broaden the online-music business, Yahoo Inc. today plans to roll out a new low-priced service that allows listeners to rent songs rather than buy them outright.
The service, dubbed Yahoo Music Unlimited , will give music fans unlimited access to more than a million songs from artists including Bruce Springsteen, Gwen Stefani and 50 Cent, for $6.99 a month. Yahoo also will offer an annual subscription for $60 -- about the cost of four or five CDs. Songs become unplayable when consumers let their subscriptions expire. The service, which lets users transfer the songs to select portable MP3-format music players, is priced far below major rivals' services: RealNetworks Inc., for example, charges $179 a year for its comparable subscription service.
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The biggest seller of music downloads is Apple Computer Inc.'s iTunes, which jumpstarted the legal downloading business in 2003. Since then Apple has sold 400 million songs and its overall music business has propelled the company's earnings and stock price. Apple doesn't offer subscriptions, instead charging users by the song or album, and then letting them keep the music. An Apple spokeswoman declined to comment on Yahoo's new service, but during the past the company has been critical of the subscription model.
Yahoo's $6.99-a-month service has the potential to change the music-buying calculus for consumers. "It's a hugely aggressive move, a shot in the arm to the subscription notion," says David Card, an analyst at Jupiter Research. The online-music business is fast-growing, but still accounts for only about 2% or less of total music sales, according to analyst estimates.
Music has become one of the most-crowded segments on the Internet, attracting a range of companies, including Apple and Microsoft. They all aim to capitalize on the trend of people accessing music through their computers. Internet companies including Yahoo are finding that online-entertainment offerings such as music help increase use of high-speed Internet connections, which helps to boost revenue from fees or advertising.
Chris Martin of Coldplay, a band on Yahoo's new service.
Yahoo brings immense Web clout to the online-music business. It is the most-visited U.S. Web site, with 99 million visitors in March, according to research firm Nielsen/NetRatings. It offers a broad portfolio of services, from email to online photos, that it can use to market the new-music service.
All the companies offering music online have to combat the easy availability of free pirated songs. The International Federation of the Phonographic Industry, a London-based trade group, says an estimated 870 million "infringing" music files were available online in January.
Most online music services have libraries of about a million songs -- Apple is an exception, with more than 1.5 million. The Yahoo service will include access to all major record labels, and a selection of the back catalog and the latest releases.
Music services generally prefer subscriptions because they can be more profitable than charging per-download, though some analysts question whether Yahoo can make money charging $60 for the service. Napster, for example, charges $14.95 a month for a music subscription service that can work with a portable player and $9.95 a month without the portability option.
Beyond pricing, Yahoo is giving users extensive ability to share their music. Yahoo says its service, which includes free software similar to Apple's iTunes jukebox, will allow subscribers to see what songs friends have on their computers, and listen to their friends' tracks if the tracks are part of Yahoo's catalog. Rival services let users share music play lists, but individuals can't always hear the songs unless they own them.
While Yahoo's service sets a new floor for online music pricing, some record executives say they aren't concerned about the low price. It is "a good thing for artists, a good thing for music, and a good experience for consumers," says Ted Cohen, senior vice president of digital development and distribution for EMI Music, a unit of the U.K.'s EMI Group PLC.
Yahoo Music General Manager David Goldberg says the service will be profitable, though he doesn't rule out raising fees at some point. He declines to provide details, but says Yahoo pays music labels royalties linked to its revenue and subscriber numbers for the service.
Yahoo's subscription service works with about 10 different portable MP3 players, all of which use Microsoft Corp.'s digital-music format. They include Dell Inc.'s DJ players and Creative Technology Ltd.'s Zen Micro. The subscription service doesn't work with Apple's iPod, by far the top-selling digital-music player.
The move underscores Yahoo's push to step up its game in music. Yahoo last year spent $160 million to acquire Musicmatch Inc., which offers song and album downloads and a nonportable subscription service. Yahoo today lowered the price of Musicmatch's subscription service to match its new offering and says it plans to merge the two services by an unspecified date. But it hasn't entirely been smooth sailing. Yahoo had originally planned to introduce its new service by March; the company says it ran into complications making sure the service would work with a variety of MP3 players.
Yahoo Music users will also be able to buy tracks under the traditional download model, with fees of 79 cents per song for subscribers and 99 cents for nonsubscribers.
雅虎将推出在线音乐服务
雅虎公司(Yahoo! Inc.)计划于周三推出非常具有定价优势的在线音乐服务，此举旨在削弱竞争对手实力，并通过租赁而非购买的音乐订购模式赢得客户。
这项名为Yahoo Music Unlimited的新服务将使得个人能无限量地获取超过100万首音乐曲目，并可以让用户将歌曲传送至MP3格式的音乐播放设备。该服务的月费为6.99美元，年费为60美元，这一定价大大低于竞争对手的价格。例如，RealNetworks Inc.同类服务的收费为每年179美元。
雅虎公司表示，低廉的价格主要是为了吸引客户选择订购音乐模式，这种模式允许付费消费者可以随时播放下载音乐。这类歌曲在订购期结束后将无法播放。同竞争对手相比，拥有百万曲目的雅虎音乐库具有规模优势，且其中还包括一定数量的独家曲目。
雅虎此举可能刺激在线音乐业务进一步扩张。分析师预计，在线音乐市场发展迅速，但目前只占音乐销售总额的2%或更低。鉴于雅虎网站每月约拥有1亿名美国客户，这项新服务获得的客户群体以及营销实力将难有对手可以匹敌。
