• Ho Hum, Another iTunes Music Store Competitor

    May 14th, 2005

    They never learn, they just never learn. Every time a new music player or music service debuts with a big publicity rush, Wall Street suggests that Apple’s dominance is poised for a big fall. You can almost predict when those statements will appear, because it happens within hours after the initial announcement of the new product or service.

    Take Napster To Go. Surely Apple can’t compete against that famous (or infamous) name, right? I mean, wasn’t Napster, in its original “outlaw” guise, the service that put music downloading on the map? Well, as you watch the company still hemorrhaging cash, you have to think that maybe, just maybe, some of those analysts and pundits got it wrong all over again.

    The latest entrant into the music download arena is an even bigger name than Napster in some circles, none other than Yahoo Now I won’t for the moment argue against Yahoo’s huge success. It is one of the few survivors of the original dot.com era to prosper big time, and thus any new service it offers must be taken seriously.

    That takes us to Yahoo Music Unlimited. Sounds catchy doesn’t it? What’s even more catchy is the price, and you have to think Yahoo is using the service as a loss leader, for how can it possibly earn a profit at $6.99 a month? It makes it seem almost a casual purchase, since even a full meal at Wendy’s (no finger jokes please!) won’t leave you with much change if you came in with that amount in your pocket. All right, that sounds promising. But you have to realize this price won’t last, since it’s obviously being done to build market share as fast as possible. Ditto the purchase price of 79 cents per song. Again, you’d fail Economics 101 if you kept that price point for very long.

    Now that’s the upside, or most of it. The downside is that, like Napster To Go and Rhapsody, it’s a Windows only product, and will not work on an iPod. Clearly Yahoo doesn’t want to mimic Rhapsody’s efforts to hack their way to iPod support. The actual list of supported players totals 13 so far, and the usual offenders are listed, such as Creative, Dell and iRiver. None of those players have made a dent in the marketplace, and will never catch on so long as their manufacturers remain clueless about user interface design and how these things are supposed to operate in the real world.

    Even worse, it appears the initial release of Yahoo Music Unlimited only full supports Microsoft Internet Explorer. Firefox users need not apply. Now I wonder what the folks at Yahoo were smoking when they came up with that design, but, to be fair, it is only a beta.

    I thought for a moment about trying the service, at least for the duration of that seven day free trial, just to see how it rates. But I caught myself in time when I realized that I’d have to set up a PC box first. Fortunately, Christopher Breen, at playlist magazine, decided to take a little time away from his hobby of disassembling iPods to spend a little time in Music Unlimited land. No, I’m only half serious about that hobby, so don’t write in Chris.

    His early reactions are reasonably favorable, but tempered by the fact that the service is still not in final release form and there are some chinks in the armor. Searching, for example, with is supposed to to be Yahoo’s forte, isn’t fully reliable yet. In addition, although Yahoo boasts a catalog of one million tunes, so far at least, classical is not part of the list.

    In any case, the big question is just how many Windows users will desert their iPods just to take advantage of the new service. Mind you, it still has the limitations of the other subscription services, which means you must pay and pay till the end of time, or until the service goes out of business, or you lose your music library. That may, or may not, require a big leap of faith. Of course, you could just purchase the tracks and be done with it. For now it seems the subscription model works best as a sampling tool. You can listen to all the songs you want, and if some withstand the test of repeated listenings, you can buy them which, in turn, gives you the right to burn the tracks onto a CD.

    So where does Apple stand in this equation? Well, I do expect Yahoo to steal market share from Napster and Rhapsody. I notice the service is compared strictly to these two rivals and it never mentions the iTunes Music Store, at least not so far. In addition to cannibalizing existing customers, it is possible that some iPod users will buy into it, strictly, as I said, for sampling. I do not expect too many iPods to be tossed in the can or retired and replaced with something like a Dell player to take advantage of this new service.

    On the other hand, if subscription services begin to steal the rug from under Apple, you can bet there are contingency plans afoot. How so? Well, I don’t know what sort of hardware changes to existing iPods would be involved, or even if those changes are possible, but if rent-a-tune proves to be a reliable alternative to buying, Apple will find a way to do it right. I can even foresee a time when the iPod’s hardware locks will be officially opened to allow you to buy songs from iTunes Music Store competitors, but that time is still a long ways off.

    Too bad Wall Street doesn’t realize that, because even if Yahoo Music Unlimited fails to catch on, they’ll still jump up and praise the next pretender to the throne.

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