Of course, the bigger story in the news these days is Microsoft's $44.6B bid for Yahoo. What would this mean, long term, for Yahoo Music Unlimited? Hard to say, but what are the odds that Microsoft would continue to use RealNetworks' Rhapsody music offering? Pretty slim, I'd say. It's far more likely that Redmond would see Yahoo Music as an adjunct to its own struggling music offerings and perhaps pull together some combination of Yahoo Music Unlimited that works with the Zune player. After all, Microsoft has already reportedly given the major labels (or at least Universal) a piece of the Zune sales price. (Though it's not like a percentage of Zune sales is going to go very far in helping the recorded music industry reverse the 10% decline in annual revenues it experienced in 2007.)
Unlimited Has Its Limits; Yahoo Taps Rhapsody on Subscription
Yahoo Music is now outsourcing its subscription-based offerings to both RealNetworks and Viacom-owned MTV, according to information disclosed Sunday. As part of the deal, subscription application Rhapsody - now a joint venture between RealNetworks and MTV - will become the exclusive provider of on-demand music services for Yahoo. The move replaces Yahoo Music Unlimited, a service that experienced tepid uptake despite aggressive pricing. Yahoo Music subscribers will migrate their accounts mid-year, according to the companies.
For RealNetworks and MTV, the move introduces Rhapsody to an immense audience, and a larger potential subscriber pool. "Soon, tens of millions of Yahoo users will be able to access their favorite music through Rhapsody – wherever they go, whenever they want it," said RealNetworks chairman and chief executive Rob Glaser. Rhapsody will also handle various non-subscription transactions, including a-la-carte downloads.
The news comes alongside a music-related acquisition by Yahoo. The mega-portal revealed that it has now purchased the privately-held FoxyTunes, a player plug-in that quickly finds lyrics, videos, bios, and other song- and artist-related information. FoxyTunes offers compatibility with 30 desktop and web-based players.