Yahoo Music Keeps Low Pricing

According to Digital Music News, "Yahoo will continue to offer rock-bottom pricing on its Music Unlimited subscription service…(offering) subscribers access to its catalog of over one million tracks for as low as $5 a month, with an annual commitment. Fans can also sign up on a month-to-month basis for $6.99. According to a recent Reuters report, those price points will be a central part of an upcoming advertising splash, which will begin later this month around the MTV Music Video Awards. "Over A Million Songs – 5 Bucks A Month – This Is Huge"…

"The move is an unexpected development, especially for competitors like Rhapsody and Napster. …it appears that the company is up for a protracted price war, and could cover its losses with healthy advertising revenues. While Yahoo could theoretically raise its prices down the road, the move will be harder and harder going forward…"

Hypebot: This is only the beginning of price cutting.  But in the end it may be that the solution is dynamic pricing.  Why should an older track cost as much as a hot new one?  Or what lower pricing that encourages experimentation on up and comers.  We’ve seen it work at retail. Lower pricing should also encourage more experimentation with the music subscription model.