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Yahoo pulls the plug on its unlimited download subscription service

Yahoo, though some people may not realize it, actually has diverse online music offerings.  Originally based on the acquired Launch music service, the service has grown into a modestly successful business, which offers over 2 million songs. 

The site, according to Yahoo, was the highest ranked music site in terms of audience reach and time spent on site for part of last year.  Obviously its competitor iTunes is by far the industry leader, but Yahoo has been relatively competitive with offerings from Amazon or other online content providers like SpiralFrog.

Despite its strong focus on its music program, Yahoo has fallen on tough times business-wide, which have forced it to reevaluate its business.  First came the announcement of 1,000 layoffs.  Now the latest casualty is one of the pillars of its online music business, Yahoo! Music Unlimited.

Yahoo has reached a deal with RealNetworks Inc.'s Rhapsody to promote the service on site, possibly undercutting its own offerings.  The full terms of the deal were not disclosed.

As part of the deal Yahoo will migrate its Yahoo! Music Unlimited customers to Rhapsody.  Yahoo! Music Unlimited was a service offered through Yahoo Music, which allowed customers to pay a monthly access fee of between $5.99 to $8.99 to gain unlimited access to a library of over 2 million songs.  The transfered customers will continue to pay their old rate, which may anger current Rhapsody customers, which pay $12.99 for unlimited access to Rhapsody's catalog of millions of songs (Rhapsody is rather non-specific about exact numbers).

Rhapsody currently has 2.75 million subscribers and it looks to grow this user base by adding a portal on Yahoo and migrating Yahoo customers.  Senior portfolio manager for Hardesty Capital, David Stepherson, commented on the move both by adding disparaging remarks about the state of Yahoo's current service and praising Yahoo for making the right move.  He stated, "On the surface, this is great for Rhapsody, because it gives them a million of new peepers that they never had before."

He continues, remarking on the fact that move allows Yahoo to remain tied in the business, "[Adopting a Rhapsody on-site portal] makes sense for Yahoo.  Their online music business was a joke; there wasn't anything to it. I look at it as more a bolt-on service they need to have. They're in front of a lot of customers, and you have to offer something. It's really a necessary component if you're going to be the front end of any search engine."

With the move Rhapsody customers will find their new homepage is Yahoo, a move that is sure to please Yahoo and incense Google.

Rhapsody and Yahoo both use DRM for most of their tracks, though bother offer select tracks DRM-free. 

Yahoo did make a minor move to expand its online music offerings in the same timeframe, acquiring FoxyTunes, who make plugins to control music players.  Their main software plugin allows control of over 30 common models.  The site interfaces with the player to provide lyrics, videos, and artist biographies based on the currently playing track.

Yahoo is also looking to explore opportunities in the world of advertising subsidized free online music.  Scott Moore, Yahoo's head of media, said, "We already have a very significant streaming ad-supported business and that's something that I'm particularly interested in continuing to expand.  In terms of downloads, that's another area where I'm not quite ready to talk about yet, but we're very interested and we're exploring our opportunities."

The music shakeup comes mostly under the radar as Yahoo is in the midst of talks with Microsoft over a buy-out.  The talks heated up with resignation of key vocal opponent, Yahoo board Chair and former CEO, Terry Semel.  Despite being overshadowed by these major events, the new Rhapsody and Yahoo deal promises to have significant effects on both companies and the online market.

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Its about time
By atwood7fan on 2/5/2008 1:07:13 PM , Rating: 2
I used to have this service and it was awful. The yahoo software had constant problems and crashes, many of the songs I had would randomly get dropped (and thus not resync) and you COULD NOT manually deactivate a computer from your service unless you could access that instance of the program at that time; i.e. if you reformat your computer and didn't deactivate first, you are SOL and just lost one of the computers you had the software on (out of three).
I switched to rhapsody halfway through last year and have not turned back. From the better, more stable interface, easier searches and better variety (even at a slightly higher price), it is a much better value.




RE: Its about time
By wordsworm on 2/5/2008 1:16:09 PM , Rating: 2
basic system specs:
Q6600
4GB RAM
500GB HD

Reason for Juke Box not installing, which I paid for?
System isn't good enough.
Yahoo's customer service is similar to MS's: they don't reply. It's a black hole. I also have to say the quality of the tunes can be dreadful, and they really don't care.

I for one applaud the chance to try a different service 'for free', since I have about 6 weeks left to my current Yahoo service.


RE: Its about time
By RamarC on 2/5/2008 2:11:02 PM , Rating: 5
agree totally that yahoo music unlimited was complete crap.

there's no way to tell what's in their library until you sign up. so i signed up and had issue after issue with their crap software and then found out they have hardly any music that i want. when i tried to cancel it they refused because my 14 day window had expired by 2 days. after several lengthy bouts with tech support which showed all the dang problems, i finally pointed out their motto that says "they'll do whatever it takes to make it right". begrudingly they refunded my money.

thinking that a year was enough time for them to get their act together, i got my wife a gift subscription. but to fill up her 30gig mp3 player, i needed unlimited "to go". they refused to upgrade her since the subscription was a gift!

so tell me where yahoo music is buried so me and my dog can pay our respects!


RE: Its about time
By CorrND on 2/5/2008 2:17:45 PM , Rating: 2
I've used both and they're not that dissimilar, really. Yahoo was once very unstable but a recent update of the Yahoo software makes it extremely stable in my experience.

I used Rhapsody for about 3 years until they jacked the rates last year. I was subscribing for a year at $100, or $8.33/mo. Then they decided to change the rates, eliminating the yearly payment plan and offering $12.99/mo or a "great savings" of $34.99 per 3 months.

Even on the 3 month plan, they were jacking my rate up 40%, which is absurd.

I switched to Yahoo where their rate is one year for $71.88 ($5.99/mo). I even signed up when they had a promotion for getting a second year for free when paying with a Mastercard, effectively making my rate $2.99/mo.

I don't mind going back to Rhapsody -- like I said, I think they're basically the same thing with a different interface -- I just hope I stay at my old rate as long as possible.


International problem with this plan
By wordsworm on 2/5/2008 1:33:35 PM , Rating: 2
I was checking out Rhapsody, and it turns out that the service is for Americans only. I've been accessing Yahoo (doesn't work on Vista) from my computer at work, which is in Korea. I am a paying customer of Yahoos. Not that Yahoo really cares about any of their customers.




RE: International problem with this plan
By hiscross on 2/5/08, Rating: 0
By wordsworm on 2/5/2008 10:04:54 PM , Rating: 2
I don't have an iPod. I don't really 'do' portable music. For whatever reason they don't like me. Like watches, they just stop working after 1 month or so. I couldn't tell why. Anyways, the thing I like best about Yahoo was the adaptive radio service. My complaint was that I couldn't figure out how to have several adaptive radio stations. It introduced me to a number of artists I wasn't familiar with. I don't really like popular music, and for all the great music from the 70s, I've listened to it enough and it's grown boring to me. For all the bad things people say about modern artists, many of the artists from the 70s made their living on 3 chords, which isn't much better. These days there are a lot of really great artists that just don't get air time and no one really knows their name. Zero 7, Air, Emiliana Torrini are just 3 groups that I 'discovered' thanks to their service. With the subscription, I could listen to a tune on the adaptive radio service and then for kicks check out the entire album. The real problem came along when I went over to Vista. They just haven't fixed the issue yet, but I still use the service at work when I have a break between classes.


RE: International problem with this plan
By wildmannz on 2/6/2008 4:54:45 PM , Rating: 2
iTunes is a great and simple solution for a LOT of people.
It's not for everyone though - don't forget that.

And of course you don't need an iPod to use iTunes - but it does help if you do portable music.


By msheredy on 2/8/2008 1:27:19 PM , Rating: 2
quote:
iTunes is a great and simple solution for a LOT of people.
It's not for everyone though - don't forget that.


Care to elaborate?


Hopefully
By TerranMagistrate on 2/5/2008 12:37:22 PM , Rating: 2
With these cost cutting measures, Yahoo! is planning on not accepting Microsoft's bid but instead intending to remain an independence company.




RE: Hopefully
By TerranMagistrate on 2/5/2008 12:38:53 PM , Rating: 2
independent, damn typo


RE: Hopefully
By DBRfreak on 2/5/2008 1:44:40 PM , Rating: 2
Possibly, but not necessarily. The goal of a publicly traded company is to increase investor (shareholder) value. A trim, streamlined company will sell for more then a debt-laden one.


Grandfathered pricing
By pomaikai on 2/5/2008 12:43:57 PM , Rating: 2
Those who get mad at yahoo customers paying a lower cost are just jealous. Who cares how much they pay. I have been a rhapsody customer for a few years now and have no problem with yahoo customers keeping there same rates. It is just a grandfathered clause for existing yahoo users. Its not like they will be bringing in new yahoo customers at that price. Some people get a break sometimes and I dont see why people get all upset because they didnt. Get over it, life is not fair, move on.




RE: Grandfathered pricing
By wordsworm on 2/5/2008 1:25:03 PM , Rating: 2
One feature that I really liked about Yahoo is the ability to create my own 'radio'. You pick a certain number of artists, and then it tries to find other artists that match your tastes, while playing your favorites. Does Rhapsody do that as well?


RE: Grandfathered pricing
By Aquila76 on 2/5/2008 1:45:00 PM , Rating: 2
Yes. After you rate Artists, Albums, or songs, it makes a "Channel" based on this. If you have a Rhapsody-based player (like the SanDisk Sansa e2XXR series), you can even move it to your PMP and listen to it anywhere.


bad move
By Screwballl on 2/5/2008 2:41:32 PM , Rating: 2
There is enough hardware and software out there that rely on the existing service that it is bad to force a move over like this.
One example is I have a Linksys streaming box that originally used musicmatch jukebox and then they sold out and moved to yahoo... but it is all free if streamed from the internet or at least the software would let me make my own playlists from networked computers and we could control it all from the streaming box... if they take out the software then I have a $200 useless piece of electronics.
I have really disliked yahoo for some years now and this just furthers it if they discontinue software support for my setup.
I am not one that buys into this "force/screw the customer into buying new hardware every year just to keep up with our crap"... if they can't support existing devices that they did previously then they need to get out of the business.




RE: bad move
By bodar on 2/5/2008 5:39:52 PM , Rating: 2
Isn't this kind of thing to be expected with a DRM-based subscription service though? The notion that someday your music will no longer play seems like something that would always loom overhead. Even Yahoo! might die one day.


RE: bad move
By jtesoro on 2/6/2008 7:39:35 AM , Rating: 2
Understand though that in the Rhapsody model, you are paying to so you can listen to any and all songs in their entire library while you are a subscriber. Once you stop paying, you can't listen to their music anymore.


Yahoo Drops the Ball
By lukasbradley on 2/5/2008 12:49:43 PM , Rating: 2
I am a fan of Yahoo, and have been a shareholder in the past. But they can't keep doing stuff like this.

I've been searching around trying to find quotes about Mark Cuban's predictions related to Yahoo Music. He definitely said they were throwing it away through misuse and ignorance years ago in a 60 Minutes interview.

Since the 90s, I was a lifetime subscriber to Musicmatch Jukebox, which was also acquired by Yahoo. It too died a slow death through mismanagement and perceived apathy. (I've since switched to WinAmp)




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