Rhapsody Snags Yahoo Music Subscribers Before Microsoft

Further consolidation in the music market....

Yahoo selling music service to Rhapsody America - USATODAY.com: "Yahoo is selling its digital music subscription service to Rhapsody America — a partnership of Real Networks and MTV Networks — as it revamps its music strategy.

Yahoo Music will continue to offer music videos, Internet radio and music downloads. But customers of its monthly Yahoo Music Unlimited service will be migrated to Rhapsody. No firm timetable has been set. Yahoo, which expects the deal to close by the middle of year, did not disclose terms."

Now all that is left if for Rhapsody to buy Napster, and the subscription market has been weened down to Rhapsody vs. The World (save Last.fm's upcoming streaming subscription service).

This story talks about Yahoo keeping their Music destination (music.yahoo.com) and ... I definitely believe the former, but I still think the latter could be up on the blocks at some point.

I think this is a good play for Rhapsody, and sooner or later people *will* understand the value of subscription. When the do, they'll be the only game in town...

Radio Adios

There is lots of talk about Yahoo's upcoming layoffs with many predicting that their Yahoo Music Unlimited subscription service going the way of the Dodo (perhaps selling off their subscriber base to Rhapsody). I agree with this speculation, particularly in light of their new strategy and their focus on "context" over "content". The other thing I think that may get hit in the downsizing is their radio product, LAUNCHcast.

Given the strategic shift taking place over there (particularly with their music products), as well as the ongoing SoundExchange negotiation debacle, I think they will cut-and-run on radio too. Radio is generally a loss-leader for the big portals and with the (unknown) future royalty rates the "loss" is going to get too much to stomach for most.

On a related note, look for AOL to dump their AOL Radio product as well (along with XM partnership) and replace it with a third party player/product. Probably from a larger terrestrial radio network... most likely related to the recent video advertising deal announced between CBS (owner of Last.fm) and Truveo (part of AOL). This would get AOL out of a money-losing content endeavor and more focused on being a cross-platform advertising network. Great for everyone. Well, except the consumers....