Yahoo said that Rhapsody will handle its digital music

February 7, 2008

I was reading TechCrunch and found this article interesting “Yahoo to Shut Premium Music Service, Redirect Users to Rhapsody”. At first Yahoo was thinking to shut its premium music service back in September 2007. They were planned to shift Yahoo Music Unlimited to the Rhapsody service. It would transfer customers to Rhapsody over the coming months, while allowing subscribers to access their music library from a new Rhapsody account. Yahoo Music Unlimited plans came in at between $5.99/ month and $8.99 /month, compared to Rhapsody’s $12.99/ month charge.

Recently they have said on Monday that Yahoo music service will be now handled by Rhapsody America, an on demand subscription service run by RealNetworks Inc and Viacom Inc. “This really works to make Rhapsody much more available to a much wider audience,” said Sheeran, a senior vice president at RealNetworks

The acquisition was acquired after announced Microsoft Corp made a $44.6 billion bid on Friday to take over Yahoo. As a result it raises a question that… whether RealNetworks and Yahoo will be able to execute their new partnership if Microsoft succeeds in buying Yahoo. The reason is relationship between Microsoft and RealNetwroks were locked in a bitter and stretched anti-trust difference of opinion for eight years until Microsoft agreed to settle with RealNetworks for $761 million in October 2005. Also RealNetworks founder and chief executive Rob Glaser, is a previous Microsoft executive. Furthermore, Microsoft already has developed huge choices of digital music products and services, which include an online music store and its Zune digital media players.

Yahoo will now focus on ad-supported streaming music and music videos. RealNetworks and Verizon Communization planned to create a digital music service called Rhapsody America, which would be able to compete with Apple Inc’s successful iTunes Online Store.



2 Responses to “Yahoo said that Rhapsody will handle its digital music”

  1. Tasia Says:

    It sure sounds like Mircosoft and Yahoo are mounting up quite the mega-company to compete with Apple, and probably Google too. But it seems like the two companies are still a bit behind in popularity. Apple pretty much holds majority popularity with its iTunes and iPod products, so Microsoft will have to work hard to compete, especially with it’s Zune product. I don’t think I’ve heard anything good about the Zune, and it doesn’t seem like anyone is using it. I wonder if the proposed Rhapsody America will be profitable?

  2. BILL Says:

    I want to bring your attention to a post at:

    The topic is ad-supported digital music as a business strategy. Would love to get some feedback…

    The summary: If you include the retail value of illgal downloads, the digital music market is now at $30 billion and rising. While digital advertising is only at $20 billion and slowing. The digital ad industry is simply not big enough to fully underwrite the digital music industry.

    There is not enough advertising demand available to subsidize the $30billion digital music market with ads; and if the inventory were created anyway, it would seriously deflate the display and keyword ad market.

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