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I finally got a chance to play around with Yahoo Music, and after reflecting on this for a while, I have come to few conclusions. This clearly is bad news for others who are playing in the subscription space, and it is not going to have much impact on Apple’s iTunes, despite the slight negative reaction from the stock markets. I think this will be a service that will act as a deflationary force in the subscription music business.
Yahoo has set the floor, and anyone who wants to win is going to have to come below $60 a year price. Yahoo will see an initial spurt because of its network. It happened before when Yahoo messenger was launched, and despite being a free service, it has not been able to knock AIM and MSN from their respective perches. Same is going to happen in the music business as well. Its aggressive moves will result in desperate counter moves, just not from Apple. (I don’t think Apple is going to sit still – they will let these guys duke it out, establish the market and then launch a premium subscription package, just like it did with a hard disk player, and a flash MP3 player.)
I look at the service – which runs only on WindowsXP, relies on Internet Explorer, and supports just ten devices – that still doesn’t integrate Yahoo’s own Music Match service, was rushed to the market. Why? Is there a rival out there which is about to introduce its own package, prompting Yahoo to rush the service to the market. Now I admit, this is pure unadulterated speculation, but given that Yahoo most of the time released fully baked and nicely garnished products, this one is setting my spidey-senses tingling.
(Still the price is very attractive, no complaint there, and could find most of my favorite artists, and the songs I like. The subscription model is something I have a tough time grappling with – I like the idea and music availability, but hate the idea of yet another subscription bill. But that’s just me, and I am sure others have different opinions.)