Yahoo Drops Subscription Service, Pacts with Rhapsody

Yahoo is dropping its subscription music service and replacing it with Rhapsody America as part of a broad strategic partnership announced by the two companies today.

As part of the deal, Yahoo will exclusively promote Rhapsody on its site and integrate the service into Yahoo Music, though the two companies are still finalizing details on how that will be done. The two plan to collaborate on other digital music services such as music downloads.

Yahoo is the No. 1 music site on the Web claiming 23 million visitors to its music section, but only a small percentage signed on for Yahoo Music Unlimited. The company hasn’t said how many Unlimited subscribers it has.

Yahoo had announced plans to de-emphasize its subscription service several months ago while focusing on its main music site. Today’s move is a new strategy for the site that relies more on partnerships, not a move away from the music business, said Yahoo VP of video and media applications Ian Rogers.

The company also announced today that it has acquired FoxyTunes, a toolbar plug-in that lets users control desktop and Web music players and find lyrics, videos and other music info.

Source Billboard

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