Yahoo, RealNetworks Cut Music Deal

Yahoo will turn off its subscription music service and refer customers to RealNetworks’ Rhapsody, the companies announced Monday.

Music remains an crucial area for Yahoo and its users; its music site gets about 22 million strange visitors each month, noted Ian Rogers, vice president of video and media applications at Yahoo. But in the fall, the company decided to de-emphasize its service, dubbed Yahoo Music Unlimited, he said.

Yahoo decided it could have a music interest and data site without actually running a music store or subscription service.

“This is about focusing in the right places,” Rogers said. “The whole point is we wanted to get resources for working on different things.”

The move will happen in the first half of that year. The companies additionally plan to work together on a download-to-own music service, Rogers said.

Company executives did not discuss the financial details of the agreement, other than to say that it

is a multi-year deal.

Yahoo made a big splash when it launched its subscription service in 2005. The company attempted to undercut competitors such as Rhapsody with lower prices and integrating the service with other popular Yahoo products. But subscription services in general have proved to be a firm sell with consumers, and Yahoo’s was no different. Despite years of effort, RealNetworks has just 2.75 million subscribers for all its various music offerings, including Rhapsody.

Yahoo doesn’t reveal how many Music Unlimited customers it has.

After Yahoo shuts down Music Unlimited, basically three such services will be left standing in the United States: Rhapsody, Napster and Microsoft’s Zune Marketplace.

Consumers just need to be educated a bit more about the value of subscription services, argued Dan Sheeran, Real’s senior vice president of business development. The marketing that Yahoo will supply Rhapsody should help “enormously” on that front, he…

Orginal post by Top Tech News

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