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Wednesday, May 11, 2005

New Yahoo! Music Service Sends Competitor Shares Plummeting

Yahoo! today announced plans to enter the online downloadable music business – and at a price that will undercut all of their competitors. Yahoo’s music service will cost $6.99 per month compared to $14.95 for Napster and $12 per month for RealNetworks' Rhapsody. Yahoo’s service will feature over one million songs to choose from and the monthly fee will let subscribers download as many songs as they want. The songs from Yahoo! will play on the Windows Media Player application or any MP3 type portable player.

Upon release of this news, RealNetworks share price dropped 21% and Napster went down 32%. Yahoo! shares on the other hand rose 14 cents. Of course all of these companies are trying to take on Apple’s iPod dominance – which I personally don’t get – iPods only play songs that have been either downloaded through iTunes or have been converted through the iTunes program. You can’t change the batteries on them yourself; you have to pay Apple a hundred bucks to do it for you. Through the Yahoo! Napster and RealNetworks song rental model, however, your portable music player has to be synchronized to the website once per month to ensure that your subscription fees have been paid. And if you want to burn those songs to a disc then an extra fee applies.

I may be a technological philistine, but I think I’ll continue to buy my music in a shop. One day I might even make the move from vinyl and eight track cassettes to some of those newfangled CD things.

1 comment:

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