October 21, 2005 at 05:30:00 PM | more stories by this author
News that monthly Music Unlimited rates will double for those who want music on portable players sends shares of rivals Napster and Real Networks rising.
Remember those cut-rate music subscription prices at Yahoo! Music Unlimited?
They'll be gone by the end of the month, at least for those hoping to transfer downloaded music to portable music players or burn them to CDs.
Yahoo! sent an e-mail to subscribers late Thursday night, saying that the monthly cost of its music subscriptions would double from $4.99 to $9.99 per month for customers who sign up for a full year of service. For people who subscribe month-to-month, the price will jump from $6.99 to $11.99 per month.
"We are committed to offering our customers the most competitive pricing possible for digital music and we hope you continue to enjoy your experience with Yahoo Music Unlimited," said the e-mail.
The changes only impact those who want to be able to transfer music they download through the service onto portable players like the iPod or burn them onto CDs. For those who subscribe to simply keep music on their computer, the price will remain an industry-low $4.99 per month.
And Yahoo! is giving those on the fence a week to decide by upping the price as of November 1 and giving people a chance to sign up until then at the old rate of $59.88 for a full year.
In a statement, the company indicated that the majority of its customers were not using the service to transfer music to media players and CDs, lessening the impact of the price increase specifically for that type of subscription.
"As of right now, the percentage of users utilizing the to-go feature is lower than the non-portable subscribers," the company said.
The move was not a huge surprise to digital music insiders, given that Yahoo! Music's prices were far below the $9.99 per month charged by rival "all-you-can-eat" subscription services Napster and RealNetworks' Rhapsody.
Because the Yahoo! move relieves whatever pricing pressure the company put on Napster and Real, shares in those companies rose today.
One day after shares in Napster Inc. fell nearly 12 percent, the cat bounced back with some help from Yahoo!, closing up 10 percent at $3.84 and jumping another 5 percent to $4.05 in after-hours trading. Napster helped its cause by issuing a clarification to a confusing regulatory filing the day before regarding its deal with Tower Music in Japan.


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