Yahoo is launching a beta version of its brand new subscription based MP3 downloading service tomorrow (May 11th, 2005) and it’s already being seen as a major threat to rivals Napster and Real Network’s Rhapsody service. Yahoo will launch its subscription service starting at US$4.99 month, compared to Napster’s US$14.95 a month fee and Rhapsody’s US$9.99 a month fee.
David Goldberg, Yahoo Music General Manager, tells Reuters that prices may go up once the trial run is complete. “We’re not saying it’s the price forever, but we’re assuming it’s the price throughout the Beta (trial) period, which is an undetermined amount of time,”
Shares of Real and Napster fell 12% and 20% in after hours trading, respectively. Yahoo, which currently operates the Yahoo Instant Messenger service, said users will be able to share music with friends as well as transfer songs to their portable devices. Yahoo’s music will only be compatible with devices that support Microsoft’s Windows Media format, forcing iPod users to use Apple’s iTunes store.
Yahoo’s initial library will consist of 1 million songs. Users who wish to copy or own the music will have to pay an additional US$0.79 per song.