Internet portal and search giant Yahoo formally announced today that all customers of Music Unlimited, Yahoo’s subscription-based music service, will be transferred to Rhapsody Networks, one of the larger competitors in the world of digital music distribution.
Though Rhapsody is not the most widely digital music service (that distinction goes to iTunes) it still boasts 2.75 million subscribers worldwide. Yahoo Music Unlimited, in comparison, is only estimated to have about 400,000 paying users. These subscribers will be migrated to Rhapsody’s service in the next half year, and will keep their old subscription rate temporarily ($5.99-$8.99) - after some period of time, they must switch to Rhapsody’s fee structure ($12.99 and up) to keep their account.
As part of the deal, Rhapsody will be integrated into Yahoo’s heavily-trafficked music portal, which sees over 20 million visitors per month. Other terms of the deal have not yet been disclosed.
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At last, major online music retailers providers are merging! While I’m as much of a capitalist and proponent of start-up entrepreneurship as the next guy, I think the recent proliferation of (mostly unsuccessful) online stores and services delivering music has really gotten out of hand. Everyone wants to beat iTunes, and no one is even close to approaching Apple’s market share. Franky, I think the market is more than saturated, and all these new retailers are not making it easy for themselves in terms of how they run their business.
Take eMusic for example. $9.99 for 30 songs is a good deal, especially since they’re MP3 format. The library isn’t as big as what iTunes offers, though, and there’s no “rollover” - forget to download your 30 MP3s one month and you’ve basically wasted your money. Nonetheless, for avid music fans it’s pretty nice, and I ended up getting my dad a subscription for awhile. After using it for about half a year, he decided he would stop since he wasn’t really downloading enough music for it to be worthwhile.
I canceled the account, only to find out a month or two later that it hadn’t been canceled. The provided login didn’t work, yet I was still being charged. The site offered no sort of customer service line to resolve this sort of thing, just a tedious automated menu system eventually telling me to email them. So I explained the situation in a polite email, sent it, and 5 minutes later received an automated response telling me to log on to the site to cancel my account, or email them. Very helpful, considering I just sent them an email asking to cancel my account, and I was unable to log into the site.
So, I sent them another email to the exact address specified, with all the information requested, and got another email within moments; the exact same email as the first automated response. Does this really sound appealing to anyone? Why does a top competitor in the digital music market have horrendous customer service?
Anecdotal examples aside, this particular sector of the music industry, while growing, is not really big enough to support the multitude of new businesses that seem to be cropping up every other week. Consolidation of the stronger ones should (hopefully) lead to more well-rounded, better-run offerings. In this case, Rhapsody is sure to see a boost in users not only from the Music Unlimited migration, but also from the exposure on Yahoo’s portal. I hope other companies - I’m looking at you, Qtrax and Spiralfrog - take note.
Tags: Digital Distribution, Mergers & Acquisitions, Rhapsody, Yahoo
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on Monday, February 4th, 2008 at 7:55 pm and is filed under Uncategorized.
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