Yahoo Dumps Subscription Service Into RealNetwork’s Lap

In a move that was expected by industry watchers, Yahoo will can its online music subscription service and port its customers to RealNetworks’s Rhapsody. Yahoo has been looking to unload its unsuccessful subscription service for quite some time, and its recent restructuring put the destination on the selling block. RealNetworks, who has a knack for picking up the pieces of failed music services, also gained some advertising promotion as part of the deal that was announced today.

Scott Moore, Yahoo’s Head of Media stated the partnership would allow Yahoo to focus its energies more on free, ad-supported music and other media offerings. However, Yahoo’s presence in music, television and movies will most likely continue to be scaled down during this pressured overall. The announcement comes on the heels of Microsoft making an unsolicited $44.6 billion bid for the concern.

Under the deal, subscribers to Yahoo Music Unlimited will be shifted to the Rhapsody service sometime in the first half of this year. Yahoo subscribers’ music library and payment plans will remain the same for a limited time after the switch, but those wishing to remain on Rhapsody eventually will be required to sign up at Rhapsody’s rates. Yahoo’s subscription rates range from $5.99 a month, if users pay for a full year in advance, or $8.99 a month. Rhapsody memberships start at $12.99 a month.

Yahoo will integrate Rhapsody into its online music portal, something both companies hope will translate into new Rhapsody subscribers. Rhapsody has 2.75 million subscribers worldwide, including customers signed up for its premium radio and mobile music services.

The Future: Yahoo is positioning the deal as a “partnership” and not a sell off, but in reality that’s exactly what it is… Yahoo, will ultimately fade its music services to black, and attempt to concentrate on its core portal services translating whatever brand equity its Yahoo Music has for advertainment.

Author: FutureMusic

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