In an effort to revamp its music strategy, Yahoo! is selling its digital music subscription service to Rhapsody America, an on-demand subscription service run by RealNetworks and Viacom.
Interestingly, this partnership was announced following last Friday's $42 billion bid by Microsoft to takeover Yahoo!
The alliance is bound to affect customers of the monthly Yahoo! Music Unlimited service who're to be migrated to Rhapsody. Prior to the deal, Yahoo! Music Unlimited offered discounted subscription rates with a one-year commitment. Post the deal, subscribers will have to pay the Rhapsody rate of $12.99 per month for a Web-only plan, else $14.99 per month for the standard plan. This will allow users to download songs to a media device.
Other features of Yahoo! Music such as music videos, Internet radio, and music downloads will be offered as earlier.
Meanwhile, as per comScore Media, Yahoo! Music is one of the most visited online music sites with nearly 20 million visitors monthly. However, according to some analysts like Phil Leigh from Inside Digital Media, the Yahoo! Music Unlimited service has only about 400,000 customers.
A key factor in Yahoo!'s decision to sell its music service seems to have been its current objective to cater to the mass audience -- largely the untapped market.
Yahoo! expects to close the deal by middle of this year. It hasn't disclosed terms of the deal yet.
Friday, May 30, 2008
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