May 10, 2005 12:34 PM PDT
Yahoo to launch new flagship music service
- Related Stories
-
Yahoo developing an audio search engine
May 5, 2005 -
Yahoo readies iTunes rival for launch
March 7, 2005 -
Yahoo's long and winding music road
September 14, 2004 -
Yahoo composing music download plan
February 3, 2004
The service, which sources say is expected to be released Wednesday, is built in large part around a monthly subscription plan similar to those now offered by Napster and RealNetworks, allowing customers to download music onto their portable devices.
But Yahoo also has spent considerable time building links to its other products, such as the company's popular instant messaging application, with the aim of making community and legal music-sharing among subscribers a core part of the service.
What's new:
Yahoo plans to launch an early version of a new music service this week in an effort to take on Apple's iTunes.
Bottom line:
Song-sharing and the community aspect of the Web giant's new subscription plan are key--and could change the market dynamics of the online music business.
Record label executives who have seen the service, which is in part based on wholesaler MusicNet's technology, say the community aspect in particular shows a promising evolution for the online music business.
"They've unpacked the opportunities and social aspects of the peer-to-peer environment, taken the best aspects away from that, and put them back into their environment," said one top record label executive familiar with recent versions of the service, who asked not to be named.
Yahoo and MusicNet each declined to comment on the potential release of the service.
Yahoo's new entry could help change market dynamics that have tipped overwhelmingly toward Apple, which now controls about 70 percent of both the MP3 player and digital song download markets.
Yahoo has a nearly unparalleled reach, with more than 300 million users worldwide, and has already developed a loyal base of listeners who use its Launch music video and Web radio service. Indeed, record label executives say Launch can already be as important as traditional radio when debuting a new album.
Much will depend on the marketing muscle put behind the service, however. Other giants, including Sony, Virgin Digital and Microsoft, have launched their own iTunes competitors, and none have so far gained substantial traction in the market.
Apple's iTunes, by contrast, has sold more than 400 million songs in the two years it has been in operation. On Tuesday, it opened four new stores in Denmark, Norway, Sweden and Switzerland, bringing its presence to 19 total countries around the world.
Yahoo has already dedicated substantial resources to its music business, however.
The Web portal bought a small digital music company called
See more CNET content tagged:
online music,
MusicNet,
Web company,
Yahoo! Inc.,
Apple Computer
