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Thursday, May 12, 2005

New Business Model May Offer To Challenge Apple’s iTune

A new business model may break Apple Computer's grip on the legal online music market, writes Walter Mossberg. Instead of selling individual songs outright for 99 cents each, as Apple does, some other companies are renting songs to users who pay a monthly subscription fee. Yahoo and RealNetworks, are taking interesting steps to change the game. Yahoo has introduced a new service that's priced at just a third of what competing rental services charge, and Real is offering some music free to entice new customers. Mossberg thinks that Yahoo's offering is bolder, and it works much better. And it can be regarded that Yahoo Music is the new champ among subscription services. The upside of the subscription model is that customers can fill their computers and portable music players with vast quantities of songs for much less money than it would cost at Apple's online iTunes store.
There are big downsides to the rental model:
- First, all the songs you ever downloaded will die and become unplayable if you stop paying your monthly subscription anytime in the future.
- Second, the subscription fees - $15 a month currently - are pretty stiff..
- Third, the rental services are far more complicated than iTunes, because they sell several categories of songs, with different rules for using them, and offer multiple subscription plans with different privileges.
- Finally, the songs rented from the subscription sites won't play on the world's favorite and best portable music players
: Apple's iPod models. The rental sites are all built on underlying Microsoft software that doesn't work on iPods.
Yahoo Music Unlimited is accessed through a new, free, music jukebox program called Yahoo Music Engine. Unlike the Yahoo offering, Real's prices are much higher, at $180 a year, compared with Yahoo's $60. Buying non-expiring downloads costs 89 cents, versus 79 cents from Yahoo though Rhapsody gives nonsubscribers 25 free "streams" of music a month, which is a novelty in the business. Mossberg rates Real’s service to be very unstable. A big part of the transfer problem probably lies at the feet of Microsoft, whose digital-rights software has proved clunky in my tests in the past. But Yahoo uses the same Microsoft software underneath the covers, and had no trouble with it at all. For those having you don't have an iPod, Yahoo is the way to go. If you love your iPod and want to collect music whose longevity doesn't depend on paying a subscription fee years into the future, stick with Apple.An interesting feature in yahoo music enables users to synch their portable players to their desktop at least once per month, regardless of whether they are streaming new songs from one of these music services. Each synch-up resets an internal clock in the player for 30 days. If a synch does not occur, the internal clock attached to each song on the player expires and the songs are rendered useless. .

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"