Yahoo! tunes in biz

Netco launches Unlimited digital music site

Two years after Apple pioneered the business, Yahoo! is getting into digital music.

Netco is banking on an advanced subscription service and aggressive pricing, along with company’s huge user base, to help it gain ground against the market’s existing major players, iTunes, Napster and RealNetworks’ Rhapsody.

On Thursday, company is launching what it calls Yahoo Music Unlimited, which offers unlimited listening and transfers to digital music players of a million-plus song library for $6.99 per month — less than half the cost of Napster and Rhapsody’s comparable $14.99-per-month offering.

Low cost, which almost certainly means Yahoo will run its subscription service at a loss, is expected to rise eventually and include a higher price point for subscribers who plan transfers to portable devices, as opposed to computer-only subs.

Yahoo’s music application will include its Launchcast radio service, management capabilities for users’ existing tracks and a 99¢-per-song download store. It also will have a unique capability allowing users to listen to music that friends have saved on their computers.

Match merger ahead

For now, Yahoo will still separately offer MusicMatch, the digital music application it acquired last year that includes a download store and streaming-only subscription service. But Netco plans to eventually combine all its music offerings.

“Our main challenge is moving people from the world of offline or where they’re not paying for music,” said Yahoo Music VP Dave Goldberg. “The goal is to have one application, but it takes some time to get everything integrated.”

Netco has contracted with digital music provider MusicNet to put together the library of music it is offering via subscription and download.