Rhapsody and Yahoo! Announce Strategic Partnership
February 4, 2008 at 6:30 AM (PT)
YAHOO! is the latest player to exit the "pay a flat monthly fee to listen to all the music you want" market. Under a strategic partnership with RHAPSODY AMERICA, YAHOO! will transfer all customers of its YAHOO! MUSIC UNLIMITED subscription service to RHAPSODY and market RHAPSODY's service on its website.
The two sides said they also plan to cooperate in other digital music initiatives, including the sale of music downloads. They declined to say how many YAHOO! customers were being transferred to RHAPSODY.
RHAPSODY AMERICA, a joint venture company owned by REALNETWORKS and VIACOM unit MTV, was formed last year through the combination of REAL'S RHAPSODY subscription service and MTV's URGE service.
"By partnering with YAHOO!, we are connecting RHAPSODY's 'jukebox in the sky' with one of the biggest music audiences on the web," said REALNETWORKS Chairman/CEO ROB GLASER. "Soon, tens of millions of YAHOO users will be able to access their favorite music through RHAPSODY -- wherever they go, whenever they want it."
"This agreement allows YAHOO! to continue its focus on being the Internet's leading starting point by creating an indispensable music experience that will drive music fans to YAHOO! first on their path to music discovery," said YAHOO SVP/Head Of Media SCOTT MOORE.
The YAHOO!-RHAPSODY deal is the latest sign of consolidation in the music subscription business. In JANUARY 2007, TIME WARNER closed its five-month-old AOL MUSIC NOW service and folded its customers into competing service NAPSTER. A month after the merger of RHAPSODY and URGE in AUGUST, BRITAIN's VIRGIN GROUP shuttered its U.S. subscription service VIRGIN DIGITAL.
RHAPSODY AMERICA's assumption of YAHOO! MUSIC UNLIMITED's customers leaves RHAPSODY and NAPSTER as the only U.S. subscription services of significant size. NAPSTER said it had about 750,000 subscribers at the end of SEPTEMBER, up from about 518,000 a year earlier. REALNETWORKS doesn't release subscriber totals, but its role as a consolidator suggests that it has sizable heft.