Yahoo lowers the price on music, ups the ante in the download audio war

June 6, 2005

Yahoo is introducing an online music subscription service that will enable users to download thousands of songs onto MP3 players for $60 a year, undercutting the prices of the current industry leaders by more than 60 percent.

The Sunnyvale-based company plans to unveil "Yahoo Music Unlimited" in a direct challenge to similar subscription services offered by RealNetworks and Napster. Yahoo is offering unlimited downloads from a library of 1 million songs for $6.99 per month or $60 for an annual subscription, a sharp discount from Napster and RealNetworks, which both charge $14.95 per month, or just under $180 annually, for similar services.

By encouraging consumers to become song renters instead of song owners, Yahoo, Napster and RealNetworks are pursuing a different sales approach from Apple Computer's iTunes music store. Under the rental model, users must pay a recurring fee and synchronize their portable music players with the subscription service at least once a month to preserve the music. If the subscription expires, the previously downloaded music becomes unplayable.

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