Yahoo is taking dramatic action to resolve problems with Yahoo Music Unlimited, its premium subscription service.
In a posting to Yahoo’s music-related blog on Monday, Ian C. Rogers, general manager of Yahoo Music, said that every month about 25 million people visit Yahoo for music-related information. But few of those visitors sign up for the premium service.
“The fact of the matter is that building a great premium music service takes a huge amount of resources and effort,” Rogers wrote, “and it was taking energy away from our important main offerings. Relatively speaking, a small percentage of [visitors] use Yahoo Music Unlimited, yet a large portion of our resources were being poured into this service. It was clear to us that we needed to make a major strategic shift.”
As a result, Rogers wrote, Yahoo is discontinuing Music Unlimited and transferring its subscribers to Real Networks’ Rhapsody music-subscription service. Subscribers will be able to transfer their music catalog and will continue paying the same price ($9 per month) that they currently pay for Music Unlimited. But once their current contract expires, Music Unlimited subscribers will be charged the same as existing Rhapsody subscribers ($12.99 per month).
The closing of Music Unlimited leaves just three music-subscription services on the Internet: Rhapsody, Napster and Microsoft’s Zune Pass. There was no immediate reaction from Microsoft, which bid $31 per share, or $44.6 billion, for Yahoo on Friday.
An intriguing element to this announcement is that Real Networks and Microsoft have their own complicated history. Founded by Rob Glaser, a former Microsoft employee, Real Networks sued Microsoft a decade ago for antitrust violations. After eight years of expensive litigation, Microsoft settled by paying Real Networks $761 million.
Rogers assured Yahoo music fans that the company is not lessening its support for online music. “Au contraire,” Rogers said. “It…