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Yahoo Music Unlimited Merely A Cheap Imitation

David Utter
Expert Author
Published: 2005-05-12

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The CFO of RealNetworks heard people say the Yahoo offering was cheap. That may not have been meant in a derogatory way.

As reported by Reuters, Roy Goodman was unimpressed with the latest offering from Sunnyvale-based Yahoo. And his company won't be drawn into a potentially destructive price war.

Mr. Goodman may wish to review his definition of the word "cheap." Rhapsody To Go costs $14.99 per month. Yahoo Music Unlimited costs $6.99 per month, or $59.88 for an annual subscription. Each company charges a per-track price to burn to CD, 89 cents for Rhapsody and 79 cents for Yahoo.

Mr. Goodman's comments at a Piper Jaffray investor conference come in the wake of RealNetwork shares dropping through Wednesday's close to today.

"Our suspicion is Yahoo is using price as a promotional tool to enter the market," Mr. Goodman said. The implication here would be that Yahoo will suddenly raise prices as the service gains market share, and that is a realistic scenario. Yahoo's own press release states the $59.88 annual subscription fee is an introductory price.

But with a strong brand name and impressive advertising revenues, Yahoo doesn't need to charge huge fees.

Fee-based content accounts for less than 15% of Yahoo's revenues; the rest come from advertising.

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About the Author:
David Utter is a staff writer for WebProNews covering technology and business. Email him here.

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