The WSJ is reporting that Yahoo will unveil its own subscription-based music service (similar to Napster to Go or RealNetworks’ Rhapsody) on Wednesday, and it’s priced to move: $7 a month or $60 a year for access to a million tracks — that annual rate is a third of Real’s cost.
Yahoo says its service will be profitable, and its low cost should hit a sweet spot that will prove whether there really is consumer interest in these subscription models. $5-7 per month is almost a throwaway amount, low enough that somebody with Yahoo’s reach should be able to attract plenty of users, so long as people really are as interested in this model as Napster and Real would have us believe.
One significant drawback to Yahoo’s service is that it currently only works with about 10 MP3 players, and the WSJ says users will have to install new software on them to use the service. Of course, one could counter that iTunes only works with one type of portable player, and it’s doing just fine. It will also be interesting to see if devices based on the new version of Windows Mobile will be compatible with the service — $5 per month, even if it requires PC syncing, will be hard for mobile operators to beat.
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